ADPR 3100- Exam 3

what are three major constraints on advertising?

1) laws and regulations of legally constituted bodies such as congress and the FCC.

2) control by the media through advertising acceptability guidelines.

3) self-regulation by advertisers and agencies using various trade practice recommendations and codes of conduct.

caveat emptor

latin for "let the buyer beware"; represents notion that there should be no government interference in the marketplace.

wheeler-lea amendment

broadened the scope of the FTC to include consumer advertising

substantiate

the key to FTC enforcement is that advertisers must be able to prove the claims made in their advertising.

three part test of the FTC to determine if an advertisement is deceptive or untruthful:

1) there must be a representation, omission, or practice that is likely to mislead the consumer.

2) the act or practice must be considered from the perspective of a consumer who is acting reasonably.

3) the representation, omission, or practice must be material.

six step typical model for FTC intervention in alleged deception:

1) there is a claim of deceptive practices to the FTC.

2) the FTC begins its investigation with a request for substantiating from the advertiser.

3) if the FTC finds the practice to be unsubstantiated and, therefore, deceptive, a complaint is issued.

4) if an advertiser refuses to sign a consent decree, the FTC issues a cease-and-desist order.

5) even if an advertiser agrees to abide by a cease-and-desist order, the FTC may find that simply stopping a particular practice does not repair past damages to consumers.

6) if a company cannot reach agreement with the FTC, its next recourse is the federal courts.

consent decree

issued by the FTC. an advertiser signs the decree, stops the practice under investigation, but admits no guilt

cease-and-desist orders

if an advertiser refuses to sign a consent decree, the FTC may issue a cease-and-desist order that can carry a $10,000-per-day fine

corrective advertising

to counteract the past residual effect of previous deceptive advertising, the FTC may require the advertiser to devote future space and time to disclosure of previous deception. Began around the late 1960s

puffery

advertiser's opinion of a product that is considered a legitimate expression of biased opinion

Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council (1976)

many advertisers consider this the major breakthrough for commercially protected speech. the court held that the state of virginia could not prohibit the advertising of prescription drug prices.

Friedman v. Rogers (1979)

court upheld the right of the state of texas to prevent an optometrist from using an "assumed name, corporate name, trade name, or any other than the name under which he is licensed to practice optometry in texas." in its decision, the court said the first amendment protection for commercial speech is not absolute and that regulation of commercial speech can be allowed even when the restrictions would be unconstitutional.

Central Hudson Gas & Electric Corp. v. Public Service Commission of New York

this case concerned a prohibition by the new york public service commission against utility advertising. case met first three guidelines of the central hudson four part test, a total prohibition of utility advertising was more extensive than necessary. was ruled unconstitutional.

central hudson four part test:

used to determine when commercial speech is constitutionally protected and when regulation is permissible.

1) is the commercial expression eligible for the first amendment protection?

2) is the government interest asserted in regulating the expression substantial?

3) if the first two tests are met, the court then considers if the regulation of advertising imposed advances the cause of the governmental interest asserted.

4) if the first three tests are met, the court must finally decide if the regulation is more extensive than necessary to serve the government's interest.

the national advertising review council (NARC)

An organization founded by the Council of Better Business Bureaus and various advertising industry groups in 1971 to promote and enforce standards of truth, accuracy, taste, morality, and social responsibility in advertising.

National Advertising Review Board (NARB)

70-person panel of professionals made up of 40 advertiser reps, 20 agency reps, and 10 public reps, they evaluate advertiser appeal the NAD or CARU cannot resolve.

national advertising division (NAD)

the primary investigative unit of the NARC self regulation program

the children's advertising review unit (CARU)

division of the Council of the Better Business Bureau that issues guidelines regulating advertising to children

according to the NAD, there are six primary areas that provide most of the challenges brought to the organization:

1) product testing

2) consumer perception studies

3) taste/sensory claims

4) pricing

5) testimonial/anecdotal evidences

6) demonstrations

the NAD and NARB cannot:

- order an advertiser to stop an ad

- impose a fine

- bar anyone from advertising

- boycott an advertiser or a product

the CARU's work primarily deals with what eight areas?

1) product presentation and claims

2) sales pressure

3) disclosures and disclaimers

4) comparative claims

5) endorsements and promotions by program or editorial characters

6) premiums, promotions, and sweepstakes

7) safety

8) interactive electronic media

In general, the CARU's mission is similar to that of the _____ except it considers the special circumstances of the younger audience reached by children-oriented advertising.

national advertising division (NAD)

product placement and product integration are not protected under the ______ _________, which only shields advertising that is not misleading.

first amendment

embedded advertising

the product placement that occurs during an event; number of times brand is mentioned verbally, guys causally sipping Gatorade on the sidelines, etc

product is visible to you in very innocent yet impactful way

Listerine Advertising Campaign

- the claim that listerine could cure colds was deemed deceptive... or illegal

- in 1975 they were forced by the FTC to spend $10 million on corrective advertising that read, "contrary to prior advertising, Listerine will not help prevent colds or sore throats or lessen their severity."

- in 2005 they also caught the eye of the FTC for "just as good as flossing" claim.

6 legal issues with advertising:

1) what is legal

2) what is illegal

3) how do I know?

4) what happens if my advertising is found illegal?

5) what does that mean for my client (the advertiser)

substantiation

what is measurable or can be proven?

- claims can be explicitly stated, implied, or demonstrated

- claims have to be backed up

- typically claims are tested in a lab, real world setting, or previous company documents are examined.

pseudo claim

-we are not told how

"Crest fights cavities"

comparison with unidentified other

nothing to compare it to

"Windex has better cleaning action"

comparison of the product to its earlier form

doesn't say in what way

"Apple is new and improved"

irrelevant comparisons

"X is the best selling product of its kind" What kind? Maybe kind is defined so narrowly that there is only one brand of its kind Also, maybe it is the best seller because it is the cheapest or because it wears out so fast

pseudo survey

Giving statistics or quotes about a product but not giving the source or verifying the claim

"4 out of 5 dentists recommend Scope"

Deception vs. Puffery

Deception is a message that is a lie and is actionable, MUST be MATERIAL (material AKA likely to change behavior)

( ex: If you come in and sign into tophat you'll get an A, because now you won't do any other assignments which affects your behavior)

Puffery- not actionable, ex. world's number one coffee/ "an advertisers opinion of a product that is considered a legitimate expression of biased opinion"

material

impactful to behaviors, attitudes, and beliefs.

five different kinds of speech and constitutional protection:

1) artistic expression (high protection)

2) political speech (high protection)

3) commercial speech (middle protection)

4) corporate speech (middle protection)

5) slander/hate speech (limited/no protection)

native advertising articles

- articles on news websites or other web content providers that resemble the format of original content on the site.

- often include featured brand or products, but not always very prominently.

- sole distinguishing characteristic is disclosure statement that tells you its advertising.

the american association of adverting (AAA) has blamed the lack of respect of the ad industry on three main reasons:

1) pressures for short-term earnings

- as advertisers with a short-term focus may use questionable messages and imagery to break through the clutter

2) client pressures

3) pressures to get and keep new business, which can cause agencies to treat other agencies with a lack of respect

commons' dilemma

A phenomenon in which members of a specific group (e.g., advertisers) face choices in which selfish, individualistic, or uncooperative decisions seem rational by virtue of short-term benefits, yet produce undesirable long-term consequences for the group as a whole...

~In other words: The choices made by advertising practitioners can have repercussions that go beyond a single ad campaign; these choices will affect advertising's interactions with society as a whole.

defining ethics:

Moral conduct. Not what can we get away with, but "what is the right thing to do?"

two areas of ethical concern:

1) advertising of ethically questionable products or services (alcohol, tobacco/weed, food and beverages, gambling/lottery, sexually oriented products).

2) ethically questionable advertising practices (targeting vulnerable populations-- children, ill, elderly,; sensitive subjects)

what four things does the federal alcohol administration act state about alcohol and advertising?

1) ads for alcoholic beverages must be truthful

2) advertising must not represent the use of alcoholic beverages as therapeutic or curative

3) advertising messages cannot suggest using alcohol improves and individual's athletic abilities

4) alcohol ads may not be directed to underage consumers (i.e., individuals under the age of 21).

television code

A code voluntarily subscribed to , enumerating specific minimum standards in programming and advertising. (prohibits drinking in ads, even though there are no such laws prohibiting drinking in ads ex-- neil patrick harris ad from class)

ethical dilemmas

promoting knowingly destructive/armful products, despite being legal (ex. cigarettes)

questionable advertising

- advertising in schools

- forms

- signage

- exclusive product contracts

- lessons

what are two types of ethics in the workplace?

1) ethically active

2) ethically impaired

ethically active ("seeing and talking practitioners")

- agencies that openly encourage ethical decisions and actions

- some norms for acting ethically in certain agencies

- recognize moral issues

- talk about the issues with co-workers and with clients

ethically impaired

- advertising people can't see ethical problems

- see primarily as only affecting themselves

- "anyone stealing my ideas?"

- ethical problems at other levels not seen

- organizational (agency/ client) & Societal levels

moral myopia

a distortion of moral vision ranging from shortsightedness to near blindness, which affects an individual's perception of an ethical dilemma

- consumers are smart

- passing the buck

- what is legal is ethical

- the first amendment misunderstanding

- going native

- the ostrich syndrome

moral muteness

the absence of communicating moral concerns in settings where such communication would be fitting. either not voicing moral concerns or communicating in ways that obscure moral beliefs and/or concerns.

- compartmentalization

- the client is always right

- ethics is bad for business

- pandora's box syndrome

the ostrich syndrome

"putting your head in the sand" and ignoring the ethical issues

pandora's box syndrome

you do not want to examine ethical issues because once you find one ethical issue you find more and more. "If we got bent out of shape over every ethical issue, we couldn't get anything done."

recognition

"smart clients" recognize that being ethical is good for their business. advertiser's role not simply doing the bidding of the client, but to make judgement and asserting opinions as would a trusted partner.

communication

strong belief in the importance of overt, direct communication regarding ethical questions.

saying no

"It's ok to get fired or resign"

moral imagination

envisioning moral alternatives

social marketing

the process of using marketing techniques to persuade consumers to adopt the behaviors advocated by a social cause (ex. using traditional advertising messages to promote behaviors such as stopping smoking, obesity prevention, or recycling).

socially responsible advertising

requires an agreement between a non-profit (or cause) and for-profit (advertiser) and the deal is struck to maximize perceived benefits to each partner

in socially responsible advertising, the for-profit (advertiser) wants to:

- associate its product with a perceived social god, boosting its appeal to a market segment that shares the perception

- increase a broader market segment's perceptions of the enterprise as socially-engaged and responsible

- derive bottom line benefits from increasing market share in the targeted segment

increased interest by causes

Causes clearly have something to gain by joining forces with corporations to develop advertising campaigns...

-Direct financial support

-Increased awareness

-Validation

-Possibility of gaining volunteer workers since corporate employees may be encouraged to donate their time to supported causes

what is the difference between social marketing and socially responsible advertising?

- difference between the two is in the messaging

- an advertising campaign that used social marketing might include a tv spot to encourage people to recycle.

- a socially responsible advertising campaign might involve a tv spot promoting a product or brand by using a message that the product was built with 100% recycled parts or that it is good for the environment

advertisers demonstrate they are socially responsible by using what three advertising messages?

- social issues linked with products

- social issues linked with corporations

- corporate donations to social issues

socially responsible advertising: social issues linked with specific products

- with these types of messages, the advertiser uses the product or service to draw consumers into the ad.

- the message becomes associated wit the specific product, creating a valuable link in the minds of consumers.

ex) toms "one for one"

socially responsible advertising: social issues linked with corporations

- these types of messages feature social issues linked to companies, but without a link to a specific product or service

- these messages position the company as one that cares about and is involved with a particular issue

socially responsible advertising: corporate donations to specific issues

- advertisers donate a percentage of their profits to a specific cause... and this contribution may be the focus of the advertising message or one of several attributes featured in the message.

- most common occurring type of socially responsible advertising because most companies already have some type of donation policy in place.

socially responsible consumers

In the past several years, consumers have become concerned with not only the purchasing process, but also the production and consumption process. individuals are examining the degree to which scarce resources are used for making products and evaluating how products are developed, tested, and disposed of.

ad council

over 50 advertising and media agencies. individual employees volunteer their time and skillset to create free advertising for social causes.