Exploring deception and puffery in television advertising

Exploring Deception and Puffery in Television Advertising

STEVEN ELI PERMUT, Ph.D. and JAMES E. HAEFNER, Ph.D.

Yale University University of Illinois

One of the greatest challenges facing marketing professionals in the next few years may well be the development of linkages between behavioral data and public policy formation. The need to know more about the potential impact of public policy decisions on consumers is now pervasively argued in the literature (Cohen 1969; Woodworth 1971). Regulatory agencies, governmental bodies, and social organizations are also clamoring for more behavioral evidence to incorporate into their decision-making processes (Jones 1971). Nowhere is this new awareness more evident than in the regulation of advertising in the mass media, particularly in the areas of deception and puffery.

FTC'S VIEW OF DECEPTION

The legal judgment of deception in advertising has evolved through hundreds of cases, and has been adequately developed elsewhere (Harvard Law Review 1967; Millstein 1964). Stated simply, the current criterion in cases of deceptive advertising is "the capacity to deceive" argument. As Pollay (1969) states: "All that seems necessary for a judgment of deception is for an advertisement to have a potential for being perceived by some consumers in a way that is discrepant with the true offering by the advertiser" (p. 628). 1 Proof of actual deception is not essential.

It is not difficult to imagine a host of difficulties in fairly imposing the "capacity to deceive" standard in the regulation of deceptive advertising- not the least of which is the total absence of any sort of benchmark or guideline by which advertisers and regulators can independently examine a given ad for its potential deceptive qualities. To further compound the

Pollay referenced Giant Food, inc. v. FTC, 322 F.2d 977 (D.C. Cir. 1963), cert. dismissed, 376 U.S. 967 (1964).

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DECEPTION AND PUFFERY IN TELEVISION ADVERTISING 157

situation, the FTC has been given almost unlimited discretion to determine how a consumer might perceive a challenged ad, and what information in the ad constitutes material factors in a purchaser's actual buying decision. The Commission is deemed to have expert judgment in matters concerning deception, and need only "look at advertisements in question, consider relevant information that may aid in interpreting advertisements, and then decide whether the advertiser is engaged in an unfair or deceitful practice" (Zenith Radio Corp. v. FTC, C.C.A.7, 1944, 143 F.2d 29).

One FTC staff member was quoted as having described the agency's "prosecutional discretion" in initially choosing ads for subsequent study in this way:

You just look at it and you get the feeling that there is something very wrong there. And I can't describe it as anything better than a feeling that it is decep t i ve . . . ! can onty describe the process as instinctive and the only reassurance I suppose that everybody has is that there are usually enormous numbers of different instincts brought to bear on a particular ad. It is very common to take it around the office and say things like 'What does that ad say?' In one case that I can think of we ran the ad endlessly for a series of secretaries whom we figured did not have our rather particular sense of instinct and just asked them, in kind of an open-ended and generally unscientific fashion, 'What do you say, what's the message of that ad? '2

Little wonder, then, that more interest is being shown for a systematic framework for assisting policymakers dealing with potentially deceptive advertisements. As Pollay (1969) suggested, "it seems much more reasonable to ask, instead of how consumers might interpret an advertisement, how potential consumers in fact do interpret an advertisement" (p. 636).

A CHANGE AT THE FTC?

In an unprecedented inquiry into modern advertising practices, the Federal Trade Commission in the fall of 1971 focused primary attention on advertising deception and its interplay with consumer behavior (Advertising Hearing, 36 Fed. Reg. 16698, August 25, 1971). It became

~Quoted by Charles Raymond in "Psychology and the Law" session of the American Marketing Associatmn Conference, New York, April, 1972.

158 PERMUT AND HAEFNER

clear to those concerned with these hearings that the regulatory process is woefully inadequate with respect to the inclusion and assessment of (behavioral) evidence on advertising's impact on the consuming public. A central problem has been the general lack of procedural encouragement within the FTC of more systematic and "scientific" analysis of consumer behavior (cf. Gellhorn 1969; Zeisel 1960) although one increasingly finds positive indications that serious attention is now being turned to reassessing the current policymaking process to draw upon available evidence dealing with consumer behavior in general as well as data dealing specifically with public policy areas (Howard and Hulbert 1973).

The Federal Trade Commission, however, will find it very difficult to obtain behavioral information dealing with its own particular area of public policy making, namely, deceptive advertising. In a review of studies dealing with applications of consumer evidence in public policy, Ross (1972) notes that almost no empirical research has been done in the area of deceptive advertising; only two works were cited: Haefner (1972) and Kottman (1964). Our own search of the non-legal literature also extends this pronouncement into areas of puffery and exaggeration. While some qualitative literature does exist for puffery and exaggeration, most notably that of Preston (1972a; 1972b), studies dealing primarily with these topics in a quantitative and behavioral framework are rare (however, see Haefner and Permut, 1973).

PURPOSE OF THE STUDY

The purpose of this study is to explore the dimensions used by subjects in assessing a series of specially selected television commercials. Because of the sparsity of previous research in the area of advertising deception, it seems worthwhile to explore what might be termed the semantics of perceived deception-that is, the way in which potentially meaningful descriptors (adjectives, phrases) are used in describing overall impressions of individual commercials. The paradigm suggested here may be found to provide meaningful summaries of viewer's evaluative responses to television commercials, and, therefore, provide a means of generating normative or benchmark data so urgently needed in the regulatory process.

METHOD

SUBJECTS. Thirty-three male and 25 female students who had just completed an introductory course in advertising at the University of Illinois participated. A dozen different major fields of study were


represented; only four students were advertising majors. The sample contained an equal number of sophomores and juniors. The use of student respondents limits generalizability in certain ways; yet, as Oakes (1972) has argued: " . . . research with college students as subjects is just as valid as research drawing on any other subject population. A behavioral phenomenon reliably exhibited is a genuine phenomenon, no matter what population is sampled in the research in which it is demonstrated . . . . This suggests, then, that the generalizability of the results of behavioral research is not a function of the population sampled, but rather that the external validity of the research depends on the interaction of subject character- istics and the particular behavioral phenomenon with which one is concerned" (pp. 961-2).

TEST INSTRUMENT. Thirty bi-polar seven-point semantic differential- type scales comprised the test instrument. Each test booklet contained 10 identical instruments, one for each of the 10 test stimuli. Following standard psychometric procedure, all scales were counter-balanced and order of presentation was randomized

Scale selection was based on a broad examination of behavioral and legal literature dealing with advertising deception, regulation, believability, exaggeration, consumer orientation, and overall affective response. While no claim is made for an exhaustive sampling of relevant descriptors, the scales chosen represent potentially relevant and meaningful response dimensions.

Subjects were exposed to a series of ten television commercials which were unofficially rated for deception by four attorneys active in the evaluation of ads involved in Federal Trade Commission litigation. Two of these ads were non-deceptive control ads, used to gain a measure of test-retest reliability. The remaining eight ads consisted of four pairs, each pair for the same product. Within each pair, one ad was unofficially rated as deceptive, the other rated as non-deceptive. The product categories represented were: gasoline, artificial fruit drink, instant mashed potatoes, and automobiles. Order of presentation was randomized.

Commercials were projected on a standard movie screen by 16-ram sound-on-film projector. After each commercial, subjects were asked to "indicate how you personally feel about the advertisement you just saw" by marking each of the 30 scales provided on the test instrument. Thus, responses were obtained one commercial at a time. Subjects were urged not to express any overt feelings (to avoid influencing others), but rather to respond only in the test booklet.

PROCEDURE. A scale X scale matrix of intercorrelations was obtained for all subjects across all eight test ads (only the 4 "deceptive'" and 4


"non-deceptive" ads were used). The matrix was submitted to principal axis factor analysis (Harmon 1960) and subsequently rotated for interpretive ease to a Varimax criterion (Kaiser 1959) as well as a Binormamin (oblique) criterion (Kaiser and Dickman 1959).

A correlation matrix standardizes response variables (i.e., means are set to zero, standard deviations equal one). While factoring a matrix of correlations is a "safe procedure" in that no assumptions need be made about the data possessing a meaningful origin or an interpretable measure of distance, additional insight can often be gained by using a cross-products matrix. Such a matrix retains information on level (lost in deviation scores) and dispersion (lost in standardizing). In addition, cross-product matrices allow one to analytically focus on individual differences a topic all too often ignored by communications researchers. Therefore, a matrix of cross-products was also submitted to principal axis factor analysis, and rotated to orthogonal and oblique solutions.

RESULTS AND DISCUSSION

Table 1 shows the factor structure for variables with loadings (correlation coefficients) of .70 or greater. Factor I, accounting for 31% of the rotated variance, appears to represent an informational-believability dimension-clearly an "evaluative" factor but different from Factor III (which accounts for 18.2% of rotated variance) in terms of the nature of the evaluation. Factor I and III appear to be markers for two different evaluative components, one concerned with informational believability, the other with entertainment-interest.

Factor II, accounting for 19.7% of rotated variance, is clearly a "deception" factor. Of particular interest is the clustering of "misleading" with "deceptive," perhaps suggesting why consumerists' complaints of "misleading" television advertising is often translated in terms of outright deception. Recent Federal Trade Commission interest in "unfair" advertising claims and dramatizations would appear warranted if unfair claims are perceived as misleading and interpreted as deceptive by a "significant" number of consumers.

Of the remaining factors, Factor IV (accounting for 9.3% of rotated variance) is perhaps the most interesting. While it is held that "puffery" is ineffectual and, therefore, permissible under present-day legal statutes, considerable debate has centered around exactly what constitutes "puffery," and whether its privileged legal status is justified. (For an excellent overview and bibliography of this topic, see Preston 1972a.)

The results of Table 1 suggest that puffery is distinct and independent

DECEPTION AND PUFFERY IN TELEVISION ADVERTISING

TABLE 1 Principle Axis Factor Loadings of . 70 or Greater for a Matrix of

IntereorreIations and a Varimax Rotation

161

Factors* Scale Items (Bipolar) I II III IV V VI VII

Honest .80 Relevant .78 Factual .77 Believable .75 Informative .75 Truthful ,73

Fraudulent .82 Misleading .82 Deceptive .79 Needs Regulation .77

Interesting .86 Entertaining .83 Effective .77 I Like It .70

Puffery (hi/low) .72

Overstated .77

Simple-Complex .90

Consumer Oriented .70

Variance explained in per cent:

31.0 19.7 13.2 9.3 7.8 7.4 6.5

* I-Information-Believability; II-Deception; III-Entertainment; IV-Puffery; V-Overstated; VI-Ambiguity; VII-Consumer Orientation.

from other variables (for the sample of respondents in this study). Puffery

is clearly distinct from decept ion-a most important point of current debate.

An oblique rotation (Binormamin) was also performed on Table 1. Almost identical factor structure emerged, with the highest correlation between any pair of factors less than or equal to .33. This suggests the


TABLE 2 Prhzciple Axis Factor Analysis for a Matrix o f Cross-Products and a

Binormamin (Oblique) Rotation

FACTOR I a FACTOR II b FACTOR III Factual Entertaining Relevant n/a Interesting Informative I Like It

FACTOR IV FACTOR V FACTOR VI Puffery (hi/low) Fraudulent Consumer Exaggerated Deceptive Orientation Ambiguous

FACTOR VII FACTOR INTERCORRELATIONS: Emotional I with III: .81 Simple-Complex I with IV: -.95 Hard Sell I with VIII: .63

IV with V: -.33

(all other intercorrelations less than .3 3)

a Only highest scales loading on each factor are listed; no numerical values are included since, unlike Varimax solutions, this procedure does not yield easily interpretable loadings. Interpretive labels are about the same as found in Table 1.

b Factor II was nearly identical to Factor I. This is a statistical phenomenon often encountered when sum of squares and cross-product matrices are factored. Factor II should be ignored when interpreting the table.

appropriateness of a Varimax (orthogonal) solution and the inference that

factors are appropriately assumed to be uncorrelated. Table 2, which focuses on individual differences, shows the resulting

factor structure for a cross-products matrix and a Binormamin (oblique) rotation. An oblique rotation would seem appropriate since individual differences should be expected to overlap rather than emerge as distinct

and independent. Essentially the same factor structure appeared in both Tables 1 and 2,

even though Table 1 resulted from a standardized matrix with an orthogonal rotation, and Table 2 resulted from a cross-products (unstandardized) matrix with an oblique rotation. One would argue that

very well-defined structure is present in the manifest data. When individual differences are emphasized in the analysis, Factor I (the

Information dimension) and Factor III (the Entertainment-Interest dimension) have a correlation of .81. Considering the strict independence of these factors found in Table 1, the only conclusion warranted is that


information-believability and entertainment-interest are dual co-existing components of overall effect or evaluation. Certainly the more each quality is perceived to exist in an advertisement, the better; at the same time, an advertisement which is well-liked and entertaining need not necessarily be perceived as informative and/or believable-viz., one is not a mere substitute for the other.

Another point of interest centers on Factor IV, the "puffery" dimension. The intercorrelation between Factor I and Factor IV was - .95 , a finding of considerable importance to advertisers (who use puffery as a substitute for "hard information") as well as to those concerned with advertising regulation (since puffery's status vis-a-vis "information" is very confused). That puffery is also defined by "exaggerated" and "ambiguous" further supports our feeling that the results of these analyses are not merely artifactual (e.g., due to scale selection, multivariate manipulation) but possess considerable face validity. Furthermore, that these results appear to represent or adequately describe latent (underlying) perceptual response dimensions for the 8 test commercials used in this study is supported by earlier studies reported by Haefner (1972), and Haefner and Permut (1973).

While cross-validation on diverse respondent samples and additional construct validation is warranted, it appears that factor analysis may provide a powerful set of multivariate techniques for exploring the perceptual dimensions of deception and puffery in commercial communi- cation.

SOME CONCLUDING NOTES

Every study, particularly exploratory ones, requires certain disclaimers and qualifiers. Briefly summarized, the following points must be considered:

1. Subjects' responses were in terms of their overall impressions to each test commercial-no attempt was made to solicit responses to individual elements of each commercial, such as the claim(s) used, the product demonstration(s), the creative execution, and so on. In many cases of advertising deception, the FTC has challenged only specific elements of a given ad and thus would not find summary judgments by consumers to be relevant. More recently, however, the FTC has charged at least one advertiser, Sterling Drug Company, for misleading and unfair impressions in its advertising for Lysol Spray Disinfectant. In this case, it was charged that the ads represent clear examples that a commercial can mislead while its statements are literally true. The researcher would be well advised to


give careful consideration to the types of potential (or actual) challenge in planning and analyzing any research project for use in studies of consumer deception.

2. Some argue that if deception takes place in an ad, it must occur without the subject 's conscious awareness; we suggest the term "functional decept ion" for this point of view. However it is clear that subjects are perfectly able to evaluate an ad in terms of a deception dimension; here we suggest the term "perceived decept ion." "Perceived decept ion" may be a very useful concept for advertisers and their agencies. If consumers perceive an ad to be deceptive, whether or not it is in fact deceptive, they may well develop some negative associations toward the product or company. If future research does indicate a linkage between "perceived decept ion" and some negative associations about the product or service, it would behoove the advertiser to make whatever changes are needed in the ad to remove the "decept ion" element. Each advertiser could clearly benefit from such a procedure in his pretesting program.

3. The definitions of deception, puffery, and other related terms are not at all clear, legally or behaviorally. As Kot tman 's (1964) study suggested, it is not uncommon to find little agreement as to what constitutes misleading advertising in the simplest of cases. Furthermore, in terms of administrative law, deception and puffery are operationally defined in non-behavioral terms, with puffery enjoying a privileged legal exemption as merely harmless "opin ion ." Behavioral researchers must remain cognizant of these potential roadblocks in developing effective public policy input.

REFERENCES

Cohen, Dorothy, 1969. "The Federal Trade Commission and the Regulation of Advertising in the Consumer Interest." Journal of Marketing 33 (January) 40-44.

"'Developments in Law-Deceptive Advertising." 1967. Harvard Law Review 80, 1005-63.

Gellhorn, E. 1969. "Proof of Consumer Deception before the Federal Trade Commission." Kansas Law Review 17,559-572.

Haefner, James E. 1972. "The Perception of Deception in Television Advertising." Unpublished doctoral dissertation, University of Minnesota.

Haefner, James E. and Permut, Steven E. 1973. "Perceived Deception In Television Advertising: A Factor Analytic Approach." Proceedings of the American Psychological Association 81st Annual Conference, Montreal, Canada (August) 821-822.

Harman, Harry H. 1960. Modern Factor Analysis. Chicago: University of Chicago Press.

Howard, John A. and Hulbert, James. 1973. "Advertising and the Public Interest, a Staff Report to the Federal Trade Commission." Washington, D.C.: Office of Legal and Public Documents, Federal Trade Commission.

DECEPTION AND PUFFERY IN TELEVISION ADVERTISING I65

Jones, Mary Gardiner. 1971. "The FTC's Need for Social Science Research." Address before the Second Annual Conference of the Association for Consumer Research, University of Maryland.

Kaiser, H. F. 1959. "Computer Programs for Varimax Rotation in Factor Analysis.'" Educational and Psychological Measurement 19, 413-420.

Kaiser, H. F. and Dickman. D. W. 1959. "Analytic Determination of Common Factors." American Psychologist 14,425 (abstract).

Kottman, John. 1964. "A Semantic Evaluation of Misleading Advertising." Journal of Communications 14, 151-157.

Millstein, Ira M. 1964. "The Federal Trade Commission and False Advertising." Columbia Law Review 64 (March) 439-499.

Preston, Ivan L. 1972a. "On the Law of Seller's Statements with Particular Emphasis on the Topic of Puffery." Working Paper, School of ~ournalism and Mass Communications, University of Wisconsin.

Preslon, Ivan L. 1972b. "Puffery A Problem the FTC Didn't Want (And May Try to Eliminate)." Journalism Quarterly 49,558-568.

Pollay, Richard. 1969. "Deceptive Advertising and Consumer Behavior: A Case for Legislative and Judicial Reform." Kansas Law Review 17,625-637.

Ross, Ivan. 1972. "Applications of Consumer Information to Public Policy Decisions." Working Paper #7, Graduate School of Business Administration, University of Minnesota.

Woodworth, Fred L. 1971. "Policy Planning and Consumer Protection-The Need for a Behavioral Perspective." Paper presented at Ohio State University, Columbus, Ohio (February 22nd).

Zeisel, Hans. 1960. "The Uniqueness of Survey Evidence." Cornell Law Quarterly 45, 332-349.

ABOUT THE AUTHORS

Dr. Steven Eli Permut is Pos tdoctora l Research Fel low at Yale Universi ty (New Haven, Conn.) in the Center for the Study of Organizations and Their Management and the Ins t i tu t ion for Social and Policy Studies, while teaching a course in cognitive processes in the Depar tment of Adminis trative Sciences. An undergraduate degree in psychology was earned at the Universi ty o f Colorado (Boulder) , while graduate degrees were taken in Communica t ions ResearcI~ at the Universi ty of Illinois at Urbana- Champaign. Publicat ions include The Journal of Psychology, Educational and Psychological Measurement, The Educational Forum, Journal of Advertising, and papers before the Amer ican Psychological Assoc ia t ion Research interests focus on interdiscipl inary applications of behavioral measurement in public pol icymaking.

Dr. James E. Haefner is Assistant Professor in the College o f Communica- tions of the Universi ty of Illinois at Urbana-Champaign. He received a B.S.C. f rom DePaul Universi ty, and bo th M.B.A. and Ph.D. f rom the Universi ty of Minnesota Graduate School of Business Adminis t ra t ion . He


has done consulting for Pillsbury Company and worked for Associates for Research in Behavior, and the Continental Casualty Insurance Company. Along with case studies and publications, he has presented papers at the Association for Consumer Research and American Psychological Associa- t ion among others. He is currently involved in a largescale project with the University of Illinois Survey Research Laboratory and the State of Illinois dealing with the effects of public service advertising on minori ty group recruitment,