8/7/2019 Module 2- Ethics and Regulations in Advertising
1/19
Ethics and Regulations in AdvertisingModule 2
8/7/2019 Module 2- Ethics and Regulations in Advertising
2/19
Agenda
1
Advertising and Social
Responsibility
Impact ofAdvertising
Women andAdvertising EthicsinAdvertising
Regulatory Bodies
8/7/2019 Module 2- Ethics and Regulations in Advertising
3/19
2
EthicsinAdvertising
Isitethical to advertise cigarettes or
to engagein alcohol advertising, which
mightpersuadeyoung peopleto start
smoking anddrinking? These and other questions of
advertising andmarketing ethicshave
becomesubjects ofheateddebatein
recentyears
8/7/2019 Module 2- Ethics and Regulations in Advertising
4/19
EthicsinAdvertising
Many laws andregulations areputinto force
thatdetermines whatispermissiblein
advertising
However, everyissueisnot controlledbyrules
Marketers are often faced withdecisions
regarding appropriateness oftheir actions,
which arebased onethical considerations
ratherthan whatis withinthe law orindustry
guidelines
Certain actionsmaybe withinthe law butstillunethical
8/7/2019 Module 2- Ethics and Regulations in Advertising
5/19
Ethical IssuesinAdvertising
1. Using unnecessarysex appeal or
showing womenin
advertisements immorally
withoutpurpose
2. Making false claims aboutthe
product withhiddentactics
3. Criticizing ordishonoring anything
whichisinreal ofsomehonorto the
society
4. Criticizing the competitors
productby anysimilarname or anyothermatching
8/7/2019 Module 2- Ethics and Regulations in Advertising
6/19
Ethical IssuesinAdvertising
5. Pointing outhuman formulationsuch as
black and fair complexion comparisonetc.6. Delivering confusing andmisleading
information
7. Showing infeasible and unnatural things or
actionsthat areshown as a result of using the
product
8. Advertising intoxicating products like wine,cigarette, tobacco etc.
8/7/2019 Module 2- Ethics and Regulations in Advertising
7/19
False or DeceptiveAdvertising
False claims aboutproducts , when
madein advertisementsdestroypublic
faithin advertising
Advertising containing falsestatements
amountsto deception
Conceptually, deceptionexists when an
advertisementisintroducedinto the
perceptual process ofsome audienceandthe output ofthatperceptual
process (i)differs fromthereality ofthe
situation, and, (ii) affectsbuying
behaviorto thedetriment ofthe
consumer
Refer Page 657to 670 of Myers andAaker Text formore on Deceptive or
FalseAdvertising
Also refer Page 656 ofthesametext for
History ofFederal Regulation of
Advertising
8/7/2019 Module 2- Ethics and Regulations in Advertising
8/19
False or DeceptiveAdvertising
Thedefinition of Deceptive
Advertisement or FalseAdvertisementwas giveninthe Wheeler- Lea Act of
USA as follows:
Theterm false advertisementmeans
an advertisement otherthan labeling,
whichismisleading in a material
respect; andindetermining whether any
advertisementismisleading, thereshall
betakeninto account (among other
things)not onlyrepresentationsmade
orsuggestedbystatement, word,
design, device, sound or any
combinationthereof, but also theextent
to whichthe advertisement failsto
reveal factsmaterial inthe light ofsuch
representations ormaterial withthe
commodityto whichthe advertisement
relates under conditionsprescribedin
said advertisement, or undersuch
conditions as are customary or usual
8/7/2019 Module 2- Ethics and Regulations in Advertising
9/19
Legal estrictionson Advertising
There are 3majorinstitutionsin the societythat
protect consumers againstmisleading or
fraudulent advertising:
1. Government agencies enforcing laws against
offenders
2. Advertising industry associations and media
groupsthatimpose selfregulation upon their
member firms and advertisers3. Advertisersthemselves acting through
enlightened self- interest and a sense ofsocial
responsibility
8/7/2019 Module 2- Ethics and Regulations in Advertising
10/19
Legal Restrictions onAdvertising
TheFederal Trade PracticesAct aspassedbythe
Federal Congressin 1890hasdeclareddealingwith unfairmethods of competitionin
commerce and unfair ordeceptive acts or
practicesin commerceto be unlawful. TheAct
added:
a. Itshall be unlawful for anyperson, partnership
or corporationto disseminate or causeto be
disseminate any false advertisement-
i. Bymails orin commerceby anymeans forthe
purpose ofinducing or whichis likelyto induce
directly orindirectlythepurpose of food,
drugs, devices or cosmetics, or
ii. By anymeans forthepurpose ofinducing or
whichis likelyto inducedirectly orindirectly
thepurchase of food, drugs, devices, or
cosmetics
b. Thedissemination orthe causing to be
disseminated of any false advertisement withinthe
provision ofsubsection (a) ofthissectionshall be
an unfair ordeceptive act orpracticein commerce
8/7/2019 Module 2- Ethics and Regulations in Advertising
11/19
Legal estrictionson Advertising
Sachar Committee hasrecommendedthefollowing acts ofsellers as Unfair Trade
Practices:
1. Misleading advertisements and false
representation- Asellershouldnot falsely
representthat-
a. The goods are of a particularstandard,
quality, grade composition, style ormodel,
iftheydo notpossessthat qualification
b. Therebuilt, second- hand goods arenew
goods
2. Offering of gifts or prizes with the
intention of not providing them and
conducting professional contests
The committeeis ofthe opinionthat all the
aforesaid unfairtradepracticesshouldbe
punishable as an offence or anyperson on
undertaking indulging in any ofthese
activitiesshouldbe liableto beprosecuted
beforethe commission
8/7/2019 Module 2- Ethics and Regulations in Advertising
12/19
Legal Restrictions onAdvertising
Advertising Standards Council of India (ASCI)
In orderto enforce anethical code, India hasthe
Advertising StandardsCouncil ofIndia (ASCI)
Itis a non- profit organizationset upby43
foundermembers who areinvolved with
advertising in one way orthe other
It wasestablishedin 1985
Its Board of Membershasmembers withequitablerepresentationto advertisers,
agencies, media and others
Itputs forward a regulating code
ASCIproposesto adjudicate on whether an
advertisementis offensive anditsdecision will
bebinding onitsmembers Itproposesto deal withthe governmentifthere
are anydisputes
Itseeksto achievethe acceptance of fair
advertising practicesinthebestinterest ofthe
ultimate consumer
8/7/2019 Module 2- Ethics and Regulations in Advertising
13/19
Need forAdvertising Regulations
Morality and Tastes:All ads are not
morally acceptable and known for
good taste
Untruthful advertisements:Almost allads are not cent percent true.
Womanizing:Almost ninety percent of
ads make use of women even if their
presence is not needed.
Advertising is mind pollutant: Toomuch advertising pollutes our mental
environment.
8/7/2019 Module 2- Ethics and Regulations in Advertising
14/19
CorrectiveAdvertising
Corrective Advertising requires advertisersto rectifypastdeception
bymaking suitablestatementsin future commercials The 1975 corrective advertising order against Warner- Lamberts
Listerineis a classic example
Listerinehas advertised for over fiftyyearsthat gargling with
Listerinemouthwashhelpedprevent colds andsorethroatsby
killing germs
The orderrequiredthemto includethestatement, Listerine will
nothelpprevent colds orsorethroats or lessentheirseverity in
$10million of advertising, which wasequal to the average annual
Listerineexpenditureduring thepriorten- yearperiod
Listerineimplementedthe orderbyembedding thestatementin a
commercial featuring two couples, each with a husband finding
himselfhaving onionbreath
The correctivedisclosure appearedmid- way inthethirty- second
spot as follows:
WhileListerine will nothelpprevent colds orsorethroats or lessen
theirseverity, breathtestsproveListerine fights onionbreathbetter
than Scope(a rival mouthwashbrand forListerine)
Refer Page 671 to 675 of Myers andAaker Text forremedies
against DeceptiveAdvertising
8/7/2019 Module 2- Ethics and Regulations in Advertising
15/19
Advertising to Children
Advertising to childrenhasbeen a major
focus ofpublic policy and concern for
manyyears
Much of childrens advertising is
deceptiveinthatit omitssignificant
information, such asthe complexity and
safety of operating toys
8/7/2019 Module 2- Ethics and Regulations in Advertising
16/19
IsAdvertising a waste ofmoney?
Itis logical to think thatif advertising
addsvalueto products orservices, it
also adds cost and affectsprices.
Thisview isnottotally correct.
Whilesome advertisedproductsdo
costmorethanthe unadvertisedproducts, the oppositeis also true.
Advertising mayhelp lowerthe overall
cost of a productmorethanenoughto
offset costs and keepthepricesdown
because ofeconomies ofscalein
production andbyencouragingcompetition
8/7/2019 Module 2- Ethics and Regulations in Advertising
17/19
Guidelines for Advertising
1. Truth: Advertising shall reveal the truth, and shall
reveal significant facts, the omission of which
would mislead the public
2. Substantiation: Advertising claimsshall be
substantiated by evidence in possession ofthe
advertiser and the advertising agencypriorto
making such claims
3. Comparisons: Advertising shall refrain frommaking false, misleading, orunsubstantiated
statementsor claims about a competitororhis
productsorservices
4. Bait Advertising: Advertising shall notofferor
services forsale unlesssuchoffer constitutes a
bona fide efforttosell the advertised productsorservices and is not a device toswitch consumers
toother goodsorservices, usuallyhigherpriced
8/7/2019 Module 2- Ethics and Regulations in Advertising
18/19
Guidelines forAdvertising
5. Guarantees and Warrantees: Advertising of
guarantees and warranteesshall beexplicit, with
sufficientinformationto apprise consumers of
theirprincipal terms and limitations or, when
space ortimerestrictionsprecludesuch
disclosures, the advertisementshall clearlyreveal
wherethe full text ofthe guarantee or warranty
canbeexaminedbeforepurchase
6. Price claims: Advertising shall avoidprice claims
that are false ormisleading, orsavings claimsthat
do not offerprovablesavings
7. Testimonials: Advertising containing testimonials
shall be limitedto those of competent witnesses
who arereflecting a real andhonest opinion or
experience
8. Taste and decency: Advertising shall be free from
statements, illustrations, orimplicationsthat are
offensiveto goodtaste orpublic decency
8/7/2019 Module 2- Ethics and Regulations in Advertising
19/19
THANK YOU !!!