Advertising as a Consumer Issue: An Historical View

Journal of Social Issues, Vol. 47. No. I , 1991, pp. 41-56

Advertising as a Consumer Issue: An Historical View

Daniel Pope University of Oregon

Since the early 20th century, advertising has been a focus of concern for the consumer movement. As advertising itself has changed, it has raised new issues for consumer advocates. Both self-regulation and external control have been utilized to deal with the consumer problems advertising has presented. With the rise of persuasive national advertising in the Progressive Era, advertising leaders launched a "Truth in Advertising" movement to establish their craft's credibility, but the industry's narrow concept of truth prevented it from dealing with some of the larger issues that advertising raised. State laws and the new Federal Trade Commission (FTC) accompanied this self-regulation. In the 1920s and 1930s, a consumer movement attacked deceptive advertising, but internal reform was limited. A reinvigorated consumer movement, a more active FTC, and advertising based on market segmentation characterized the 1960s and 1970s, and advertising interests initiated new self-regulatory procedures in 1971. More recently, deregulation has emerged as a rival method for promoting consumer well-being. The broadened focus of consumerism suggests that advertising will continue to be a matter of concern for consumer advocates.

Throughout the last century, the American consumer movement has fought on two fronts. On one hand, it has struggled to improve the quality, availability, and safety of the goods and services consumers buy. On the other, it has battled to amend some of the means by which products are sold. Prominent among these methods, advertising has been a major concern of consumerists. Just as the strength of the consumer movement has ebbed and flowed, popular pressure for changes in advertising methods and messages has fluctuated as well.

I wish to thank M o m Friedman and two anonymous reviewers for their helpful comments and

Correspondence regarding this article should be addressed to Daniel Pope, History Department, suggestions.

University of Oregon, Eugene, OR 97403.

41

0 0 2 2 - 4 5 3 7 / 9 1 / 0 3 0 0 ~ 1 ~ , 5 0 / 1 0 1991 Tk Society for thc Rychological Study of Social Issues

American advertising in a recognizably modern form is a concomitant of the rise of big business in the late 19th and early 20th centuries. Mass production methods and declining transportation costs created the possibility of national markets in scores of industries. New means of distributing and marketing these goods were needed to reach consumers effectively. As Chandler (1962, 1977) has shown, the characteristic feature of the rise of big business was the vertical integration of manufacturers forward into distribution. As standardized, pack- aged, and branded consumer goods became the hallmarks of an emerging consumer society, national advertising for those products became the society’s characteristic iconography. While retail advertising at the local level grew apace, it was relatively free of the serious ethical and social controversies concerning national advertising and consumption.

Business needs for new kinds of advertising services brought about the rise of the advertising industry. By the 1890s, advertising agencies were evolving away from selling newspaper and magazine space toward their newly defined roles as servants and counselors to advertisers. By World War I, it was generally taken for granted that advertising agencies worked not for the media but for businesses that advertised, and that the agencies’ task was to devise and imple- ment appropriate selling strategies for their clients. Trade associations, some formal training programs, and loudly proclaimed “standards of practice and ethics” bespoke a growing-although incomplete and uncertain-sense of professionalism in the advertising industry (Pope, 1983).

In 1986, Americans spent about $102 billion on advertising, whereas for 1900, rough estimates range from about one-quarter to one-half billion dollars. Advertising now is shaped by products, media, and styles that early 20th-century Americans could not anticipate or even imagine. These changes have in turn brought new ethical questions to the fore and provoked new challenges from consumer movements. To control the abuses of advertising, real or perceived, Americans have resorted to a mixed bag of regulation, consisting of external and internal as well as formal and informal measures. Tracing these two themes-the shifting focus of concern and the varied methods of control-as they have evolved from the Progressive Era through the interwar decades to the consumer society of postwar America is the main task of this article. Unlike other contribu- tions to this journal issue, this article concentrates on historical trends and institu- tional developments. It is hoped that this will provide a valuable context for understanding the significance of the behavioral science research findings that other articles present.

The Patent Medicine Era

Until about a century ago, there was little if any interest in the social and ethical implications of advertising in itself. Since advertising consisted for the

Advertising as a Consumer Issue 43

most part of announcing the availability of products, enhanced perhaps with a few offhand superlatives, there was little need to pay attention to the advertising messages themselves. The basic tenet of the era was that a “meritorious” product, “something that people want,” would mean a meritorious advertisement (Pope, 1983, p. 9). As long as advertising was merely a matter of “making known” the commodities available, it was unlikely to raise ethical issues. Since advertisers prepared most of the advertisements they employed, there was no full-time corps of copywriters who might develop their own ethical standards.

Even then, the theory that advertising merely reflected the worth of the goods it sold was outmoded in a crucial respect. Proprietary drugs were already the leaders among national advertisers; for .these, persuasion, not announcement, was clearly the main task of advertising. (“Patent medicine” is usually a mis- nomer, since manufacturers generally preferred secrecy over patent protection as a means of defending their wares from duplication.) Skillful advertising could sell bad products, as one promoter boastfully observed: “I can advertise dish water and sell it, just as well as an article of merit. It is all in the advertising” (Young, 1961, p. 101). It is clear today that many leading drugs of the late 19th century were harmful; even more were ineffective; and virtually all made false and misleading claims on labels and packages, in print advertising, and in the medicine shows used to promote them. Nevertheless, the drugs themselves, not their means of promotion, drew the fire of critics and rivals.

What limits there were on advertising copy in the late 19th century were imposed by a few publishers who rejected categories of advertisements they considered unsavory. As early as the 1840s, Horace Greeley’s New York Tribune turned away notices for abortionists and venereal disease “cures.” A few others followed suit. The E. C. Allen Company, publishers of several popular maga- zines during the Gilded Age, compiled a scrapbook of advertisements it had declined between 1886 and 1891. A few of these offered commodities such as a passkey for more than 900 locks, or Confederate currency, but most had sexual implications or purposes (Medical Advertisements, no date). Occasionally, the publisher explained to advertisers or their agents why they had declined an advertisement. “Of course the photos of actresses which are sent out are mild enough,” Allen conceded, “but the suggestiveness annoys thousands of our subscribers” (Allen, 1887, pp. 507-508).

The same focus on products, not advertising, characterized the movement for pure food regulation in the second half of the 19th century. Potentially dangerous contaminants and adulterants alarmed some scientists. Meat packers wanted inspection to get their products past European import barriers. Merchants and manufacturers sought legislative relief from rival products, as dairymen did battle with oleomargarine makers, cream-of-tartar baking-powder manufacturers traded accusations with those who used alum, and straight-whiskey distillers

castigated blended whiskeys (Young, 1989). For none of these groups did advertising loom large as a consumer problem.

The Progressive Era and the Truth in Advertising Movement

By the end of the century, several forces converged to bring about a growing sensitivity to the impact of advertising itself. Of course, the rapid growth of advertising itself (its volume more than tripled between 1890 and 1914) focused attention on this burgeoning phenomenon. Advertising agencies gradually weaned themselves away from dependence on medical advertising and stressed their persuasive skills, “salesmanship in print,” in the words of one agency’s slogan. Advertising men sought recognition of their professionalism and legit- imation of their practices. Ethical self-examination was a means to these ends. One agent boasted in 191 1, “There is no higher calling, ministers not excepted, in America or any other country than ours” (Associated Advertising Clubs of America, no date, p. 223).

As Thelen (1983, 1986) has contended, a heightened and expanded consumer consciousness emerging around the turn of the century was at the heart of the Progressive movement. The growing gap between the makers and the buyers of mass-produced goods stimulated a cross-class alliance of those who felt vic- timized by a monopolistic, impersonal, and inequitable market. In this climate, public distrust of advertising could flourish along with consumers’ suspicions about advertised goods. It is hard to measure, retrospectively, public attitudes toward advertising in the Progressive Era, but advertising men frequently wor- ried about consumer skepticism.

A third reason why attention in the’ Progressive Era began to focus on advertising can be found in the moralism of Progressivism. These “ministers of reform,” to use Crunden’s (1982) label, debated social issues in the language of individual character and virtue. Muckrakers exemplified the movement’s faith in the power of exposure to shock consciences and motivate change. Sunlight, as the muckrakers said, was the best disinfectant. Dishonesty destroyed character. Harvey Wiley commented in 1902 that those who committed consumer fraud might lose more than their customers: “No man can continually deceive his customer and retain that high moral sense which is the very soul of trade. The consumer may not be much out of pocket. . . , but the manufacturers and dealers will soon be out of conscience” (Young, 1989, p. 159). Before the rise of big business, Americans had invested the competitive market with moral qualities; it was a proving ground for individual initiative, diligence, and respon- sibility. In the Progressive Era, it appeared to reformers that many kinds of markets were antithetical to the character traits they wished to foster. Hence regulation was needed.

Despite the heightened attention to advertising messages, most of the major


consumer-oriented measures of the Progressive Era focused on products and prices, not promotion. The Food and Drugs Act of 1906, for example, dealt with product adulteration and misbranding on packages and labels, not with advertising. (Indeed, not until passage of the Sherley amendment of 1912 did the law clearly ban false curative claims on drug labels.) Samuel Hopkins Adams, whose articles in Collier’s had done much to pave the way for passage of the 1906 measure, conceded that failure to deal with advertising limited its effectiveness. “We who fought to get the law passed aimed at the wrong side of the bottle,” he wrote. “We should have attacked the advertisements in the newspapers. That is where the real damage is done” (Young, 1967, p. 55). The Federal Trade Com- mission (FK) Act of 1914 sought to outlaw “unfair methods of competition,” and advertising was scarcely mentioned in hearings and debates on the measure (Tedlow, 1981, pp. 39-41; Miracle & Nevett, 1987, p. 15).

Efforts to control abuses in advertising in the early 20th century in fact came primarily from those in the advertising industry most interested in securing its place in the American business world. Heightened attention to advertising’s credibility in the first decade of the century foreshadowed the appearance around 1911 of an energetic “Truth in Advertising” movement. In the words of a participant who later chronicled it, the movement “burst into brilliant flames” at the Boston conference of the Associated Advertising Clubs of America (AACA) that August (Kenner, 1936, p. 19). Advertising leaders preached lay sermons on truth at churches in their convention cities and sang anthems to the cause (Ken- ner, 1936, p. 58). (“My emblem ’tis of thee, Emblem of AAC. Of Truth I sing . . .” is an example.)

The Truth in Advertising crusade did not rely on moral exhortation alone. Prinrer’s Ink, the industry’s leading trade publication, commissioned an attorney to draft a model statute banning dishonest advertising. The statute did not require proof of either intent to deceive or actual harm to any consumer, the stumbling blocks in earlier laws and common law actions. Enacted first in Ohio in 1913, versions of the model statute had become law in 23 states by 1921. It continued to spread, so that by the beginning of the 198Os, all but three states had the law or some variant of it on their books.

The Truth in Advertising movement complemented its legal campaign with local organizing. Advertising clubs around the country set up “vigilance committees” to investigate problems, press for voluntary compliance, and in extreme cases, pursue legal remedies. Vigilance committees handled complaints from consumers and competitors, and in some cases initiated probes themselves. Evolving into local Better Business Bureaus, the committees in larger cities frequently could afford full-time professional staff workers.

In sum, then, the Progressive Era advertising reform efforts indicate that external regulation and self-regulation were complements, not opponents. Unlike some efforts at internal reform of business practices that were designed to stave

off government action, the Truth in Advertising movement initiated legislation and then established organizations to bring about compliance with those laws. In the case of food and drug legislation, businesses had backed federal action to eliminate the costs of complying with varying state regulations, but the Truth in Advertising forces sought standardization through the model statute’s enactment state by state.

Although the model statute appeared to be a powerful weapon against dishonest advertising, the state laws have proven to be of little use in curtailing the problem. As a legal commentator wrote a generation ago, “The criminal nature of the sanction, the inclusion of requirements of intent, materiality, and other restrictive elements, and the failure to provide administrative machinery for enforcement . . . have severely limited the effectiveness of these statutes in sup- pressing false or misleading advertising” ( “Regulation of Advertising,” 1956, pp. 1064- 1065). More generally, the advertising industry’s desire for self-regulation has meant that prosecutions have been infrequent and convictions rarer still. Private negotiation resolved most complaints.

The early 20th-century Truth in Advertising movement represented a sincere effort to respond to an emergent consumer problem. Yet its limitations must also be acknowledged. The single-minded fixation on truthfulness, interpreted liter- ally, meant that the movement was generally oblivious to other ethical and social implications of consumer persuasion. Advertising’s leaders decried outright falsehoods even as they developed new methods of promotion that relied on a rhetoric in which truth and falsity were often secondary or irrelevant concerns. For example, life insurance advertising before the Progressive Era had stressed policies’ investment value. They asserted-sometimes deceptively-that insurance yielded high financial returns. After Progressive Era reforms had eliminated some of the speculative aspects of life insurance, the insurers adopted emotional, sentimental appeals. Equitable Life Assurance advertising declared, “Home- BREAD and BUTTER-CIDTHES and SHOES-SOMETIMES the DOC- TOR-and the Chance to go to SCHOOL. All these your widow or your orphans must have” (Pope, 1983, p. 229). This kind of advertising was not demonstrably false or misleading; indeed, it made no substantial factual claim. But advertising that played upon private anxieties for corporate profit raised unsettling questions, ones that the self-regulatory movement was unwilling and probably unable to contemplate.

The Truth in Advertising movement usually construed its problem as elim- inating some marginal “rotten apples” from a fundamentally healthy craft. By ridding advertising of the taint of medical hucksters, “blue sky” financial schemes, unreliable itinerant peddlers, and the like, it would become a more profitable tool for mainstream businesses. This effort could shade into wielding Truth in Advertising as a competitive weapon. For example, local vigilance committees sometimes directed their crusade against retailers who sold un-


branded or store-branded products as substitutes for established national brands, or against sellers who insisted on using comparative price claims as a basis for their advertising.

Advertising and Consumer Protection in Prosperity and Depression

Although the FTC’s mandate had initially involved controlling competitors, not protecting consumers, the agency soon turned its attention to advertising. Leaders of the Associated Advertising Clubs in fact encouraged this move, contending that it would make the work of the Truth in Advertising movement more effective. They had no doubt that dishonest advertising was an unfair method of competition that harmed rivals who would not stoop to deceit. At the same time, court decisions indicated that the judiciary would look favorably on commission action against dishonest advertising but might reject other interpreta- tions of unfair methods of competition. By 1925, advertising cases accounted for three-quarters of the FTC’s orders (Miracle & Nevett, 1987, p. 16).

In 1931, the U.S. Supreme Court, in the Ruladum case, upheld a lower court decision that the commission lacked the authority to take action against a fraudulently advertised weight-reducing medicine. Although the scope of the ruling remained uncertain, its implications alarmed New Deal era consumer advocates. The Wheeler-Lea amendments of 1938 declared that “unfair or deceptive acts or practices in commerce” were illegal and offered a definition of false advertisement that offered “remarkable” opportunities for FTC action (Tedlow, 198 1, p. 53).

Along with federal regulatory efforts, the interwar decades saw consumer awareness take on new organizational and tactical forms. Stuart Chase and F. J. Schlink published Your Money‘s Worth in 1927, the first in a series of muckraking volumes that exposed both unsafe products and deceptive promotional appeals. They hoped to supplant the tendentious and unreliable product information that sellers provided with disinterested appraisals of comparative quality. To this end, Chase and Schlink took the lead in forming Consumers Research, which hired experts to test products and published results in a monthly bulletin. A few years later, the directors of Consumers Research split over its employees’ rights to unionize, and the dissidents started Consumers Union, publishers of Con- sumer Reports.

For many of the consumerists, Depression marketplace deception was symptomatic of the deeper failings of capitalism. James Rorty, who had been a successful copywriter himself, published Our Master’s Voice in 1934; in it, he blended Marx, Veblen, and his own muckraking inclinations into a bitter, ironic commentary. Rorty contended that advertising itself was not the fundamental p b l e m . It was “not an independent social or economic entity. It is merely a function of business management” (Rorty, 1934, p. 305; Pope, 1988). However,

in practice the efforts of the consumer groups generally reinforced earlier notions that truthful information was at the heart of consumers’ needs; if such information could be made available, then buyers could use it judiciously. Although the left-wing founders of Consumers Union intended their group to advocate fundamental social change, by the end of the 1930s they realized that its middle-class members valued reliable testing of consumer products more than exhortations to change the system (Silber, 1983, pp. 24-29). Unlike the Progressive Era reformers, however, consumer advocates in the interwar years showed little faith that advertising itself, even if regulated, could supply the truthful information buyers required.

The consumer movement’s suspicion of advertising mirrored growing hostility in the advertising industry to those who criticized the craft from the outside. For the most part, during the 1920s and 1930s advertising people viewed consumerism with hostility. Perhaps persuaded that the Truth in Advertising crusade had solved the basic problems of deception, advertising leaders considered the consumer movement as a radical effort to censor publicity, restrict buyers’ freedom of choice in the marketplace, and ultimately, destroy the system of mass marketing that had given Americans the world’s highest standard of living. Within the industry, however, there were moves toward self-regulation, in part to stave off burdensome external controls, in part to curb what advertising people themselves considered to be persistent abuses. The National Better Business Bureau, founded in 1925, attempted to deal with problems in national advertising that the local bureaus could not handle, but it was unable to administer anything more than verbal slaps on the wrists of miscreants. The American Association of Advertising Agencies devised a code of ethics for its members in 1924, but it was vague and lacked even the threat of punishment. The Depression not only heightened consumer pressure on advertising but also drove many anxious advertisers to adopt more desperate measures in their sales strategies. Hoping to arrest the erosion of credibility, Printers’ Ink and the National Better Business Bureau in 1931 launched another drive for self-regulation. Copy codes were proclaimed in 1932, and advertising interests formed a review committee to examine cases of misleading advertising the following year. However, this flurry of action came to naught without broad industry backing and a means of enforcement (Miracle & Nevett, 1987, pp. 18-20; Pease, 1958).

The advertising industry in the interwar years thus could point to only modest advances in the area of self-regulation. However, as Marchand (1985) has shown, during these years advertising leaders began to identify a broader social purpose in their work. A few, such as Earnest Elmo Calkins, saw aesthetic, temperate, and tasteful advertising as social uplift, creating a refined and genteel consuming public. For most, however, advertising was to serve as a therapeutic force, easing the anxieties of a modem, complex way of life. Advertising could, its advocates suggested, advise and guide consumers in a society where older


sources of information were less available; it could “re-personalize” daily life in the modem world; it could link consumption to traditions of community and family that might otherwise be threatened. Never fully articulated, this emergent justification nevertheless suggested that advertising had a social function that transcended the value of any individual advertisement. It was a balm for the pains and frictions of modernity.

The Postwar Era

The consumerist initiatives of the Depression languished in many instances during the post-World War I1 era. Prosperity and broadly probusiness attitudes in the 1940s and 1950s removed some of the consumer movement’s sense of urgen- cy. Public education for prudent consumption appeared more productive than confrontation or pressures for increased regulation of business. Despite the clari- fication of its authority to take action against deceptive advertising, the FTC in these years was hamstrung by bureaucratic inertia and a cumbersome legal process. In a case that exemplified the futility of many FTC efforts, the commission in 1943 commenced an action against Carter’s Little Liver Pills. The action required their manufacturer to remove the word “liver” from the name, since the medicine did nothing to aid the liver. Sixteen years later, after 1 1 ,OOO pages of testimony and 750 exhibits, the FTC finally won (Tedlow, 1981, p. 57). A business journalist in 1957 described the FTC as “a headless, drifting agency which acted desultorily and seldom hurt anybody very much” (Young, 1967,

The postwar years, however, saw both changes in the nature of American advertising and the appearance of new critiques of advertising and consumption. These set the stage for a revival of consumerism and new efforts to control advertising during the 1960s. Once again, the focus of consumer concern shifted, and once again the mix of industry self-regulation and governmental control was altered. Advertising volume expanded along with the booming economy, but perhaps more crucially, it employed the new medium of television to reach its audiences. By 1960, advertisers spent over $1.5 billion on television. The new medium’s fusion of sight, sound, and motion in America’s living rooms presented unprecedented opportunities to advertisers and raised new questions about the power of advertising messages. Two well-known cases indicate that television forced an expansion of the concept of truth in advertising. In the early 1960s, to demonstrate that Colgate-Palmolive Co.’s shaving cream would allow an ordi- nary razor to shave sandpaper, commercial producers used a mock-up of sand sprinkled on plexiglass. Plexiglas was used since real paper does not look like sandpaper on television. Although the shaving cream did in fact allow the shaving of sandpaper (if the cream soaked in long enough), the commission main- tained that the televised display itself either had to be genuine or had to reveal

p. 306).

that it was a simulation. The U.S. Supreme Court upheld this position in 1965. In 1970, the FTC took action against Campbell Soup for a commercial for vegetable soup, in which the photographers had put clear marbles at the bottom of a bowl to make the soup’s ingredients rise to the top and appear more abundant. Campbell agreed in a consent order to discontinue the procedure. In these cases competitors, not consumers, initiated the complaints. Thus the FTC’s mandate to protect consumers might also serve competing business interests.

Under the banner of motivation research, some advertising agencies in the 1950s turned to psychodynamic theories, claiming that these approaches would reveal underlying consumer motives. Although the concepts were of questionable value to advertisers, they alarmed some of those who womed about advertising’s influence. Vance Packard’s 1957 best-seller, The Hidden Persuaders, expressed alarm about motivation research and the initial efforts of researchers to use subliminal advertising methods. For Packard, the issue was not whether consumers would be misled into wasteful or harmful purchases, but whether the skills of social science enlisted in the cause of advertising would produce a persuasive juggernaut that would threaten individual freedom and autonomy. John Kenneth Galbraith’s The Afluent Society (1958) was less sensational but still portrayed advertising as a potent weapon in the hands of a corporate system that promoted “private opulence and public squalor.” These two quite different works did much to expand the scope of concern about the ethical and social implications of mass consumer advertising.

Although new media and new advertising theories stimulated emerging consumerist concern, I would contend that a more fundamental shift in the nature of marketing raised a host of new issues about advertising’s social role and its relation to consumers. Elsewhere I have labeled this the “Era of Market Segmen- tation” (Pope, 1983, p. 252). Mass markets, created in the late 19th and early 20th century, have in the last generation undergone a remarkable process of fragmentation. New production techniques have removed some of the economies of scale of mass production. The profusion of different products, packages, and sizes has been a dubious blessing for people who may feel overburdened by the constant need to make purchase choices. Monolithic mass media appeals have yielded to ways of targeting distinct audiences. An age that employed advertising as a force for cultural homogeneity and standardization of daily life has been transformed into one where advertising recognizes social and cultural diversity, and presents consumption as an arena of expressive individualism. Marketers now routinely aim their sales efforts not at everybody but at a carefully defined and closely scrutinized segment, delineated by demography, social class, or psychological traits.

The dominance of market segmentation raises some unsettling issues for both advertisers and the consumer movement. In the Progressive Era, the center of attention shifted from product to message, as advertising experts sought legiti-


macy by upholding a literal-minded standard of truth. In the era of market segmentation, however, the new focus is on the audience and its response. The acceptability of an advertisement thus depends not so much on the “encoded” message as on the one that the targeted recipients might “decode.” This, in turn, might depend on who constitutes the intended audience-their backgrounds, capabilities, and life situations. Neither the advertising industry nor its regulators have been able to adapt fully to the implications of the market segmentation revolution. Although self-regulation and external control have recognized some of the new problems, the current challenge to policymakers is to find appropriate ways to curtail the abuses of the new era.

Advertising and the New Consumerism

The “new consumerism” that began in the 1960s owed little directly to the changing character of marketing. Rather, it was the product of a broader challenge to established authority, a partial delegitimation of dominant institutions. Reawakened environmentalism, a multifaceted women’s movement, challenges to business and government secrecy, and the skill of consumer activists in using modem methods of propaganda and publicity all played their roles. Yet although its origins lay elsewhere, the modem consumer movement has had to contend with the new advertising and marketing climate.

Awakened from its postwar torpor by some sharp consumerist attacks (e.g., by Ralph Nader-Cox, Rllmeth, & Schultz, 1969), the FTC emerged by the early 1970s as a more energetic regulator of advertising practices. As Preston (1983) has pointed out, a hallmark of the commission’s new vigor was its willingness to use the findings of social science research on consumer behavior. A series of hearings in 1971 on modern advertising practices signaled the FTC’s readiness to break away from formalistic and routinized ways of acting. Con- sumerists had long complained that the FTC and other regulatory agencies shared a revolving door with regulated businesses, but by the 1970s consumer activists themselves were finding positions on the commission’s staff. In 1977, President Jimmy Carter appointed Michael Pertschuk to chair the F K ; Pertschuk, for- merly a staffer for Senator Warren Magnuson (Democrat of Washington), brought an activist agenda to his new position. For a marketing environment of segmentation and targeting, this shift in focus made sense; deceptiveness and unfairness depend not only on what an ad says but also on the group to which it is directed.

New areas of FTC concern in the 1970s indicate how much the definition of the problem had broadened from the Progressive Era’s fixation on literal truth. The FTC began a program requiring advertisers to provide information substan- tiating the claims they made in their publicity. Failure to supply adequate evi- dence, in the judgment of commission staff, could bring about a charge of deception or unfairness. Indeed, the FTC articulated a principle stating that

advertising claims that lacked a “reasonable basis” for belief were unfair practices.

At the same time, regulators focused on certain kinds of especially troubling advertising. Advertising to children became a hotly debated issue. One advertising man expressed the industry perspective pungently:

When you sell a woman on a product and she goes into the store and finds your brand isn’t in stock she’ll probably forget about it. But when you sell a kid on your product, if he can’t get it he will throw himself on the floor, stamp his feet, and cry. You can’t get a reaction like that out of an adult. (Federal Trade Commission, 1978, p. 17)

Many consumer advocates contended that the incomplete cognitive development of younger children made many advertising practices used in “kidvid” inherently unfair practices. Action for Children’s Television, a Massachusetts-based consumer group, pressed for stringent limitations; similarly, Robert Choate exposed the high sugar levels in many presweetened cereals and crusaded for bans on advertising in that category on children’s shows. Extensive 1979 hearings on advertising aimed at children, however, produced no new FTC action. The next year, as a result of industry pressure, Congress banned the FTC from enacting any rule concerning children’s television on the basis of the ongoing proceed- ings. In 1981, the commission’s staff concluded that it could promulgate no workable regulation of children’s television and recommended dropping the topic (see Kunkel & Roberts, this issue).

In other cases as well, targeted marketing campaigns became controversial precisely because of the segments they aimed at. Thus, recently, Secretary of Health and Human Services Louis Sullivan sharply attacked plans to market a new cigarette brand targeted to African-Americans (Hilts, 1990). He pointed out that blacks already were more likely to smoke than other Americans and that they also suffered disproportionately from smoking-related diseases. Antismoking activists and black leaders concerned with health issues also objected stren- uously. Soon thereafter, R. J. Reynolds announced that it was canceling its plans to test market the brand. Advertising to the elderly, especially for medical insurance, has also drawn fire for employing scare tactics and promoting p r l y designed coverage. Alcoholic beverage advertising that focused on young people provoked objections that it was encouraging underage drinking. Feminists have frequently protested against advertising that promoted demeaning stereotypes of women. These cases indicate the broadening agenda of the consumer movement’s concern with advertising. In each of these areas, the legitimacy of the product or service and the veracity of the advertising messages were only a part of the concern. Critics deemed the campaigns inappropriate because of the nature of the audiences to which they were addressed.

The advertising industry responded to consumerist demands in the 1960s and 1970s less intransigently than it had in the interwar years. A new breed of


advertising men (and, increasingly, women) wrought a “creative revolution” on Madison Avenue in the 1960s; they were more detached, ironic, and skeptical about their labors and the brands they promoted. In this context, it was easier for a new wave of self-regulatory activity to gain acceptance. This self-regulation also was intended to stave off hostile government action. According to one spokesman, “It would be better to wear a self-regulatory hair shirt now, than a tight-fitting legislative straight-jacket later on” (Miracle & Nevett, 1987, p. 26).

In 197 1, consultation among advertiser, agency, and media interests bore fruit in the creation of a new self-regulatory system. The scheme designated the National Advertising Division (NAD) of the Council of Better Business Bureaus as an investigating body and created a National Advertising Review Board (NARB) to evaluate complaints about advertising. The NARB is tripartite, with 30 representatives from advertisers, 10 from agencies, and 10 from public and consumer groups. To handle cases, it constitutes panels comprised of 3 advertiser representatives and 1 each from the public and agency contingents. The NAD considers complaints and requests substantiation from advertisers. If it deems action necessary, it may ask advertisers to alter or discontinue their messages. Should an advertiser refuse to comply, either side may present the case to a NARB panel. Again, if the panel judges an advertisement to be misleading, it requests alteration or discontinuance. When advertisers still will not accept the panel’s recommendations, the NARB can then turn the cases over to govemmen- tal officials.

Other self-regulatory bodies complement the national structure. Almost simultaneously with the establishment of the NAD/NARB, Better Business Bu- reaus around the country initiated Local Advertising Review Programs; by 1986, Miracle and Nevett (1987, p. 92) found that 33 of these groups had been formed. The NAD/NARB in 1974 established a semiautonomous Children’s Advertising Review Unit. This organization deals with individual cases, promulgates guidelines for advertising directed to children, and sponsors a research clearinghouse on the subject. Most of the major media screen advertisements for acceptability; for example, each of the television networks examines tens of thousands of commercials each year for acceptability. An official of the American Broadcast- ing Company stated in 1984 that his network reviewed some 30,000 new commercials annually, rejecting about 3% and requesting modifications to about 35% (Miracle & Nevett, 1987, p. 98).

Since the mid-l970s, pressure for deregulation has partially stymied governmental and industry efforts to regulate advertising. The FTC under Michael Pertschuk in the late 1970s provoked a business backlash; for awhile in 1980 Congress appeared on the verge of passing a bill that would have removed the commission’; authority to promulgate any trade regulation rules. Indeed, the FTC Improvements Act of 1980 imposed a host of restrictions on the agency’s methods and policies, and gave Congress a legislative veto power over its rules.

Subsequent Reagan appointees, including Chairman James Miller, were both attentive to business protests against FTC actions and hostile to governmental regulation. Miller favored using cost-benefit analysis to determine which cases of deceptive advertising to pursue. He asked Congress to enact a restrictive definition of deceptive advertising. When Congress rejected this path, a majority of the commissioners voted to apply it anyway in FTC work. These standards required a showing of “likeliness to mislead” the “reasonable” consumer about “material” matters rather than incidental ones (Preston, 1987, p. 298).

Antitrust concerns have negatively affected some self-regulatory activity. Most notably, they caused the National Association of Broadcasters in 1982 to suspend its code that, among other provisions, had set limits on the number of minutes of commercial time member stations could present each hour. Ironically, it was fear of antitrust action that prevented the media from taking an active role in the NAD/NARB self-regulatory process. Consumer well-being is the justification of the deregulatory thrust; its proponents claim that free markets will serve consumer interests better than will governmental or industry restriction. This rationale (admittedly like the rationale for vigorous regulation) depends on some questionable underlying postulates about market performance and consumer choice that combine empirical and ideological assertions.

The advertising industry itself expressed mixed feelings about the deregulation movement of the early Reagan administration. On the one hand, practi- tioners had long considered themselves hamstrung by needless niggling control and censorship. The architects of the creative revolution had little patience with what they perceived as bureaucratic obstacles to innovative and stimulating advertising. On the other hand, the advertising industry knew that its credibility (a sine qua non of effective advertising, most believed) was endangered by unfairness and deception. When FTC Chairman Miller launched his campaign for less stringent controls, the trade newspaper Advertising Age described the industry’s reaction as, “Slow down, buddy.” Advertising groups “want to be protected from irresponsible FTC behavior, but they also know from 67 years of experience that the marketplace becomes a jungle in the absence of a strong FTC” (“Why Industry Wants,” 1982, p. 16). As in earlier years, the advertising industry can hardly be said to have “captured” its main regulatory overseer; advertising leaders found the FTC’s reluctance to pursue deceptive and unfair advertising cases during the Reagan years little more pleasing than the activism of the previous decade had been. The record does not support “public interest” theories regarding regulation either. Both activists and deregulators claimed to be acting in the public interest, but each of their agendas served a distinct ideological and political constituency. (Hasin, 1987, finds an antibusiness “new class” orienta- tion among the consumer movement allies on the FTC.)

This brief historical survey has traced the evolution of consumer movement concern, from products to messages to audiences. During the 20th century there


have been variations in the intensity and approach of regulatory and self-regulatory efforts. Historical analysis gives no sure guidelines for perceiving future trends, but it may provide some hints. For American advertisers, their agencies, and the media they employ, advertising’s credibility has been a precious but perishable commodity. Soaring advertising volume and impressive developments in techniques of persuasion have not been matched by comparable advances in public trust and belief. Throughout most of the century, advertising leaders have sought to build acceptance by making advertising truthful. However, consumer movements have demanded more than this. To the four consumer rights (to safety, to be informed, to choice, and to be heard) that John F. Kennedy enunci- ated in 1962, consumer activists have added several more, including redress, education, and a healthy environment (see Lampman, 1988; Maynes, 1988). In the future, it is likely that consumerists will address such questions as the problems of disadvantaged consumers, the distribution of income and wealth, consumer needs for autonomy, participation, and creativity, and international and cross-cultural consumer issues (see, for example, Metzen, 1986). As the consumer movement’s agenda broadens, it seems likely that advertising will remain a continuing, even growing, source of concern.

References

Allen, E. C. (1887, October 21). Letterbook, general (Vol. E-5, pp. 507-508). Boston, MA: E. C. Allen Collection, Baker Library, Harvard Business School.

Associated Advertising Clubs of America. (no date). Seventh annual convention of the AACA. Boston, August 1 4 , 1911. Boston: Pilgrim Publicity Association.

Chandler, A. D., Jr. (1962). Sfrufegy and structure. Cambridge, MA: MIT Press. Chandler, A. D., Jr. (1977). The visible hand. Cambridge, MA: Harvard University Press. Cox, E. F., Fellmeth, R. C., & Schultz, J. E. (1969). “The Nuder Report” on the Federal Trade

Cmnden, R. M. (1982). Ministers ofrefonn. New York: Basic Books. Federal Trade Commission. (1978). Federal Trade Commission stuff report on television advertising

to children. Washington, DC: U.S. Government Rinting Office. Galbraith, J. K. (1958). The afluent society. Boston: Houghton Mifflin. Hasin, B. R. (1987). Consumers, commissions, and congress. New Bmnswick, NJ: Transaction. Hilts, P. J. (1990, January 19). Health chief assails Reynolds Co. for ads that target blacks. New York

Kenner, H. J. (1936). Thefightfor truth in advertising. New York Round Table Press. Lampman, R. J. (1988). JFK’s four consumer rights: A retrospective view. In E. S. Maynes & ACCI

Research Committee (Eds.), The frontier of research in the consumer interest (pp. 19-33). Columbia, MO: American Council on Consumer Interests.

Marchand, R. (1985). Advertising the American dream. Berkeley: University of California Press. Maynes, E. S. (1988). The fmt word, the last word. In E. S. Maynes & ACCI Research Committee

(Eds.), The Frontier ofresearch in the consumer interest (pp. 3-16). Columbia, MO: Ameri- can Council on Consumer Interests.

Medical advertisements not accepted (Vol. 0-4). (no date). Boston: E. C. Allen Collection, Baker Library, Harvard Business School.

Metzen, E. J. (1986). Consumerism in the evolving future. In P. N. Bloom & R. B. Smith (Eds.), The future of consumerism (pp. 3-15). Lexington, MA: Heath.

Miracle, G. E., & Nevett, T. (1987). Voluntary regulation ofadvertising. Lexington, MA: Heath.

Commission. New York: Baron.

Times, pp. Al , A15.

Packard, V. (1957). The hidden persuuders. New York: McKay. Pease, 0. (1958). The responsibilities of American advertising. New Haven, CT: Yale University

Pope, D. (1983). The muking ofmodern advertising. New York: Basic Books. Pope, D. (1988). His master's voice: James Rorty and the critique of advertising. The Maryland

Historian, 19, 5-15. Preston, I. L. (1983). A review of the literature on advertising regulation. Current Issues and

Research in Advertising, 6(2), 1-37. Preston, 1. L. (1987). A review of the literature on advertising regulation, 1983-1987. CurrentIssues

and Research in Advertising, 10(2), 297-325. Regulation of advertising. (1956). Columbia Law Review, 56, 1018-1 11 1. Rorty, J. (1934). Our muster's voice. New York John Day. Silber, N. I. (1983). Test and protest. New York: Holmes & Meier. Tedlow, R. S. (1981). From competitor to consumer: The changing focus of federal regulation of

advertising, 1914-1938. Business History Review. 55, 35-58. Thelen, D. P. (1983). Patterns of consumer consciousness in the Progressive Movement: Robert M.

La Follette, the antitrust persuasion, and labor legislation. In R. M. Aderman (Ed.), The quest for social justice (pp. 19-47). Madison: University of Wisconsin Press.

Thelen, D. P. (1986). Puths of resistance. New York: Oxford University Press. Why industry wants Miller to slow down. (1982, March 29). Advertising Age, p. 16. Young, J. H. (1961). The toadstool millionaires. Princeton, NJ: Princeton University Press. Young, J. H. (1967). The nwdical messiahs. Princeton, NJ: Princeton University Press. Young, J. H. (1989). Pure food. Princeton, NJ: Princeton University Press.

Press.

DANIEL POPE is Associate Professor of History at the University of Oregon, Eugene. He has studied the history of advertising, marketing, and consumption, and is the author of The Making of Modern Advertising and articles on related topics. He is currently writing a history of the Washington Public Power Supply System nuclear projects.

Documents

Advertising as a Consumer Issue: An Historical View