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 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.

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 (McDonald’s) • Media choices … Saturday morning TV

7. Ethics and Tobacco • Tobacco and Alcohol Products • Budweiser – the “fur factor” • Cigarette products such as Dakota, 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 - • 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 • 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 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

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 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!

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 • Substantiate Claims • Refrain from False Comparisons • no bait! • 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 mediato 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 World Wide Web • Banning 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. Irwin/McGraw-Hill Slide 21-6 • The McGraw-Hill Companies, Inc., 1998