COMMUNICATOR’S ETHICAL RESPONSIBILITIES
Ethicsare the “shoulds” and “oughts” of behavior. They are “the right thing to
do.”Morals are frameworks for right actions and are more the domain of religion
and philosophy. When faced with an ethical decision, the difficulty often lies in
making choices from equally compelling or competing options. These issues are
explored in this chapter’s Practical Tips feature that focuses upon a Benetton
campaign that challenged personal and professional ethics.
Personal and Professional Ethics
Ethical decisions are usually complex and involve navigating a moral maze of
conflicting forces. They demand the ability to engage in what ethicists call “moral
reasoning.”
As a professional, you must be aware of industry standards as well as ethical
questions that underlie the core issues already discussed in this chapter. More
importantly, however, personal judgment, moral reasoning resting on an intuitive
sense of right and wrong, and a moral compass must be used to determine when
an idea is misleading, insensitive, too over the top, or too manipulative.
Professionals in advertising by and large see themselves as ethical people.
However, the polls indicate that the public does not. In a recent poll conducted by
the Gallup organization, advertising practitioners ranked near the bottom, with
nurses, doctors and pharmacists at the top. Read the Matter of Practicefeature in
this chapter and begin to think about how you might improve society with your
life’s work.
Professional Code of Ethics
Industry standards can help with a decision about ethical behavior. Many
professions have written a code of ethics to help guide practitioners toward ethical
behavior, including the American Association of Advertising Agencies (AAAA),
the Public Relations Society of America, and the Word of Mouth Marketing
Association.
In an effort to help advertisers build consumer trust and brand loyalty in a global
and digital economy, the Institute for Advertising Ethics created eight Principles
for Advertising Ethics, which emphasize the importance of transparency and the
need to conduct business relationships with consumers in a fair, honest, and
forthright manner. (See Figure 3.1.)
International Standards and Codes
Standards of professional behavior are found not only in the United States or
other Western countries. Many other countries around the globe have codes
related to ethics or professional behavior.
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WHY AND HOW IS BRAND COMMUNICATION REGULATED?
Various systems are in place to monitor the social responsibility of advertising and
other brand communication, including laws, government regulations and their
regulatory bodies, professional oversight groups, and industry self-regulation.
Figure 3.2 in the textbook identifies the organizations with oversight
responsibility for advertising and groups them in terms of five specific categories:
government, media, industry, public or community groups, and the competition.
Brand Communication’s Legal Environment
Making and enforcing laws is the domain of the government. Congress makes
laws and regulatory agencies in the executive branch of the federal government
enforce laws related to advertising. The following list summarizes important
advertising legislation, most of which shows the growing authority of regulatory
bodies, such as the FTC, to regulate advertising.
The Pure Food and Drug Act forbids the manufacture, sale or transport of
adulterated or fraudulently labeled foods and drugs in interstate commerce.
The Federal Trade CommissionAct establishes the commission, a body of
specialists with broad powers to investigate and to issue cease-and-desist
orders to enforce Section 5, which declares that “unfair methods of
competition in commerce are unlawful.”
The Wheeler-Lea Act prohibits unfair and deceptive acts and practices
regardless of whether competition is injured and places advertising of foods
and drugs under FTC jurisdiction.
The Lanham Act provides protection for trademarks from competitors and
also encompasses false advertising.
The Magnuson-Moss Warranty/FTC Improvement Actauthorizes the FTC to
determine rules concerning consumer warranties and provides for consumer
access to means of redress, such as a class action lawsuit. It also expands FTC
regulatory powers over unfair or deceptive acts or practices and allows it to
require restitution for deceptively written warranties costing the consumer
more than $5.
The FTCImprovement Act provides Congress with veto power over FTC
regulation rules. It was enacted to limit FTC powers to regulate “unfairness”
issues in designing trade regulation rules on advertising.
The Telemarketing and Consumer Fraud and Abuse ProtectionAct specifies
that telemarketers may not call anyone who requests not to be contacted.
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Trademark and Copyright Protection
A trademark is a brand, corporate or store name, or distinctive symbol that
identifies the seller’s brand and thus differentiates it from the brands of other
sellers. A trademark must be registered through the United States Patent and
Trademark Office (PTO) of the Department of Commerce.
Audio trademarks are protected, as are uniform resource locators (URLs).
A copyright gives an organization the exclusive right to use or reproduce original
work, such as an advertisement or package design, for a period of time. Common
designs or symbols, however, cannot be copyrighted. Controls for copyright
protection are provided by the Library of Congress.
Copyright infringement can occur when a product is used in an ad without proper
permission. Copycat ads that use the message strategy of another advertiser may
also be subject to copyright infringement charges.
Brand Communication and the First Amendment
The most basic federal law that governs advertising is the First Amendment to the
U.S. Constitution, which says that Congress shall make no law “. . . abridging the
freedom of speech, or of the press; . . .” First Amendment protection extends to
commercial speech, which is speech that promotes commercial activity.
Protection of advertising as commercial speech has varied over the years. A
number of cases have attempted to change the common view of advertising as
commercial speech. Although no one expects advertising to have the same
constitutional protection of free speech that is given to individuals, courts
throughout the country are narrowing the gap.
Essentially, the Supreme Court has ruled that only truthful commercial speech is
protected, not misleading or deceptive statements. Because the nation’s courts
continue to reinterpret how the First Amendment applies in different cases,
advertisers need to keep close track of legal developments.
Within the chapter is a list of thirteen decisions by the U.S. Supreme Court that
amend the First Amendment rulings on commercial speech, thus impacting
advertising.
International Laws and Regulations
As advertisers, agencies, and media become more and more global, it will be
imperative that the players understand the local ethical standards and laws in the
countries in which they operate. Marketing practices, such as pricing and price
advertising, vary in their legal and regulatory restrictions. Some product
categories, such as OTC drugs, are particularly difficult to work with because
regulations about their marketing and advertising are different in every country.
Advertising for certain types of products is banned.
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There are also differences in the legal use of various marketing communication
tools. A contest or promotion might be successful in one country and illegal in
another. Different laws and self-regulatory codes about direct marketing exist in
different European Union countries. Because of the difficulty in complying with
widely varying laws, international advertisers often work with either local
agencies or with international agencies that have local affiliates and experts.
The Regulatory Environment
In addition to specific legislation that affects the practice of marketing
communication, there are also government bodies that oversee the application of
these laws and establish standards and regulations that marketers must meet. The
FTC is the primary body that oversees marketing communication, but a number of
other agencies are also involved in regulating the messages sent to consumers.
They are summarized in a table in the text. Along with the FTC, the Food and
Drug Administration (FDA) and the Federal Communications Commission are
dynamic components of the regulatory environment.
The Federal Trade Commission (FTC)
The FTC is the primary agency governing the advertising industry. Its main focus
with respect to advertising is to identify and eliminate ads that deceive or mislead
the consumer. Some FTC responsibilities include:
Unfairness: Initiate investigations against companies that engage in unfair
competition or deceptive practices.
Deception: Regulate acts and practices that deceive businesses or consumers
and issue cease-and-desist orders where such practices exist. Cease-and-desist
orders require that the practice be stopped within 30 days; an order given to
one firm is applicable to all firms in the industry.
Violations: Fine people or companies that violate either (1) a trade regulation
rule or (2) a cease-and-desist order given to any other firm in the industry.
Specifically, the FTC oversees the false advertising. In recent years, that
oversight has focused on health and weight-loss business practices, 900 telephone
numbers, telemarketing, and advertising targeting children and the elderly. The
FTC hosts the National Do Not Call Registry and monitors the ratings system and
advertising practices of the film, music, and electronic games industries. The
FTC’s reports to Congress cover advertising on television and websites, as well as
print media.
The existence of a regulatory agency such as the FTC influences advertisers’
behavior. Although most cases never reach the FTC, advertisers prefer not to risk
long legal battles with the agency. Advertisers are also aware that competitors
may complain to the FTC about a questionable advertisement. Such a move can
cost the offending organization millions of dollars.
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The FTC revised its guidelines governing testimonial advertisements, bloggers,
and celebrity endorsements in October 2009 for the first time since 1980. These
guidelines toughen rules for endorsements and testimonials by requiring that
results touted by endorsers are likely to be typical.
The Food and Drug Administration (FDA)
The FDA is the regulatory division of the Department of Health and Human
Services that oversees package labeling, ingredient listings, and advertising for
food and drugs. It also determines the safety and purity of foods and cosmetics. It
is a watchdog for drug advertising, specifically in the controversial area of
direct-to-consumer ads for prescription drugs.
The Federal Communications Commission (FCC)
The FCC is designed to protect the public interest in radio and television
broadcast communications and can issue and revoke licenses to broadcasting
stations. The agency monitors only advertisements that have been the subject of
complaints and works closely with the FTC to eliminate false and deceptive
advertising.
Other Regulatory Bodies
Below is a list of other key regulatory agencies.
Bureau of Alcohol, Tobacco, and Firearms: Regulates deception in advertising
and establishes labeling requirements for the liquor industry.
U.S. Postal Service: Regulates direct mail and magazine advertising and has
control over the areas of obscenity, lotteries, and fraud. The postmaster general
also has the power to withhold mail that promotes lotteries.
States’ Attorneys General: Seeks to regulate advertising at the state level.
The Impact of Regulation
In our discussion of issues we mentioned several that have spurred governmental
regulation, such as children’s advertising, deception, and claim substantiation. In
this section we discuss these regulations in terms of the government agencies
taking responsibility for them.
The FTC and Children’s Advertising
Developing responsible advertising aimed at audiences of children is a critical
issue. The FTC and other governmental agencies have gotten involved with the
regulation of marketing to children.
After a 1978 study found that the average child viewed more than 20,000
television commercials per year, a heated debate ensued. One side favored
regulation because of children’s inability to evaluate advertising messages and
make purchasing decision. The other side opposed regulation, arguing that many
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self-regulatory mechanisms already existed and the proper place for restriction of
advertising to children was in the home.
In 1990 Congress passed the Children’s Television Act, which placed 10.5-
minute-per-hour ceilings for commercials in children’s weekend television
programming and 12-minute-per-hour limits for weekday programs. The act also
set rules requiring that commercial breaks be clearly distinguished from
programming and barring the use of program characters to promote products.
Advocates for children’s television continue to argue that many stations made
little effort to comply with the 1990 act and petitioned the FCC to increase the
required number of educational programs to be shown daily. In 1996, an
agreement was reached requiring all TV stations to air three hours of children’s
educational shows a week.
Regulating Deception
Deceptive advertising is advertising intended to mislead consumers by making
claims that are false or failing to make full disclosure of important facts or both.
The current FTC policy on deception contains three basic elements:
Misleading: Where there is representation, omission, or practice, there must
be a high probability that it will mislead the consumer.
Reasonableness: The perspective of the “reasonable consumer” is used to
judge deception. The FTC tests reasonableness by looking at whether the
consumer’s interpretation or reaction to an advertisement is reasonable.
Injurious: The deception must lead to material injury. In other words, the
deception must influence consumers’ decisionmaking about products and
services.
Regulating Substantiation
Claim substantiation is an area of particular concern to the FTC in determining
whether or not an advertisement is misleading. The advertiser should have a
reasonable basis for making a claim about product performance or run the risk of
an FTC investigation. In determining the reasonableness of a claim, the FTC
considers:
Type and specificity of claim.
Type of product.
Possible consequences of the false claims.
Degree of reliance on the claims by consumers.
The type and accessibility of evidence.
What substantiation is reasonable?
Remedies for Deception and Unfair Advertising
The common sources of complaints concerning deceptive or unfair advertising
practices are competitors, the public, and the FTC’s own monitors. After
determination that the ad is deceptive, the first step in the regulation process is to
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issue a consent decree. If justified, the commission can proceed with the
following courses of action:
Cease-and-desist orders. If an advertiser refuses to sign a consent decree and
the FTC determines deception is substantial, this order is issued.
Corrective advertising. The FTC may require this when consumer research
determines than an advertising campaign has perpetuated lasting false beliefs.
Consumer redress. By law, the FTC is empowered to obtain consumer
redress when a person or a firm engages in deceptive practices. A judge can
order cancellation or reformation of contracts, refund of money or return of
property, payment of damages, and/or public notification.
Media Review of Advertising
The media attempts to regulate advertising by screening and rejecting ads that
violate their standards of truth and good taste. Most networks have a Standards
and Practices Department that screens every ad and gives approval before the ad
can run. Each medium has the discretion to accept or reject a particular ad.
The First Amendment gives any publisher the right to refuse to publish anything
the company does not want to publish, and this sometimes creates battles between
media companies and advertisers.
Self-Regulation
Responsible advertisers take the initiative and establish individual ethical
standards that anticipate and even go beyond possible complaints. Such a
proactive stance helps the creative process and avoids the kinds of disasters that
result from violating the law or offending members of society.
Self-Discipline
In an organization, such as an advertising agency, exercises self discipline when it
develops, uses, and enforces norms within its own practices. Virtually all major
advertisers and advertising agencies have in-house ad review procedures,
including reviews by agency and client attorneys.
Industry Self-Regulation
When the development, use, and enforcement of norms comes from within the
industry, the term industry self-regulationis used. The most effective attempts at
pure self-regulation have come through industry groups, such as the Advertising
Review Council (ARC) and the Better Business Bureau (BBB).
In 1971, the National Advertising Review Council, now known as the Advertising
Self-Regulatory Council was established. It attempts to negotiate voluntary
withdrawal of national advertising that professionals consider deceptive. The two
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operating arms of the Advertising Self-Regulatory Council are NAD and NARB.
Neither is a government agency.
The National Advertising Division (NAD) is made up of people from the field of
advertising. In evaluates complaints submitted by consumers, consumer groups,
industrial organizations, and advertising firms. NAD attempts to settle disputes,
but when a satisfactory resolution cannot be reached, NAD refers the case to
NARB.
The National Advertising Review Board (NARB) is a 50-person regulatory group
that represents national advertisers, advertising agencies, and other professional
fields. When an advertiser appeals a case to NARB, it faces a panel of five people
who attempt to resolve the issue. Although neither NAD nor NARB have any real
power other than threatening to invite government intervention, these groups have
been effective in controlling cases of deception and misleading advertising. Figure
3.3 illustrates the NARB appeal process.
Self-Regulation by Public and Community Groups
The advertising industry voluntarily involves non-industry representatives or the media in
the development, application and enforcement of norms.
Local groups. At the local level, self-regulation has been supported by the BBB.
Although the BBB has no legal power, it receives and investigates complaints and
maintains files on violators. It also assists local law enforcement officials in
prosecuting violators.
Consumer activist groups. Consumer groups of all kinds monitor advertising
practices.
END-OF-CHAPTER SUPPORT
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