Chapter 2 The Social and Legal Aspects of Advertising

Chapter 2 The Social and Legal Aspects of Advertising

1) Introduction

Advertising – is the most visible activity of business.; is widely criticized not only for the role it plays in selling products but also for the way it influences our society

2) Social Criticism of Advertising

Advertising debases our language

Criticism: Advertising is breezy, informal, causal, improper. It has destroyed the dignity of the language

Defense: Advertising must speak to people. Advertising research shows that people respond better to a down-to-earth language.

Advertising make us too materialistic

Criticism: Advertising adversely affects our value system. It promise the greater status, greater social acceptance and greater sex appeal.

Defense: Everyone can choose the degree to which he wish to indulge his desires, needs and fantasies.

Advertising manipulates us into buying things we donЎЇt need

Criticism: Advertising forces people to buy things we donЎЇt need by playing on their emotions.

Defense: There is no matter how much advertisers try to convince us, they canЎЇt make us to buy the product we donЎЇt need;

Even if the ad succeeds in convincing us to buy, it canЎЇt get us to buy the product again if we donЎЇt like it.

Advertising too excessive

Criticism: There are simply too much of advertising.

Defense:

1. Advertising is the tool of communication (megaphone) for manufacturers

2. Mass distribution supports free enterprise system

3. People may simply not to pay attention

Advertising is offensive or in a bad taste

Criticism: Many people find advertising offensive to their religious convictions, morality or political perspective. Others find the use of advertising techniques emphasize sex, violence or body functions to be in a bad taste.

Defense: What is good taste for some is bad taste for others. Tastes changes, so what is considered offensive today may not be offensive in the future.

Advertising perpetuates stereotypes

Criticism: Advertising perpetuates members of racial and ethnic groups in stereotypical ways.

Defense: Advertisers have become increasingly sensitive to their treatment of minorities and women. Sometimes they are not the entire segments of their market.

Advertising is deceptive

False promises Incomplete description Misleading comparison

Bait-and-switch offers Visual distortions False testimonials

False comparison Partial disclosure Small print classifications

3) Government Regulation of Advertising

Regulation by the Federal Government

Federal Trade Commission (FTC) (1914) – is the major regulator of national advertising used to promote products sold in interstate commerce.

Its efforts are largely directed towards consumer protection by policing the marketing done through the media.

Federal Communications Commission (FCC) (1934) – has jurisdiction over the radio, TV, telephone, and telegraph industries.

It maintains indirect control over advertising through its authority to license or revoke the license of the broadcast stations

Food and Drug Administration (FDA) – has authority over the labeling, packaging and branding of packaged food and therapeutic devices and has limited authority over nutritional claims made in food advertising.

The FDA is authorized to require warning and caution statements on packages.

Patent and Trademark Office – regulates registration of patent and trademarks.

E.g. if a trademark is used illegally by another, the trademark owner can complain by notifying the violator in writing.

Library of Congress – registered and protects all copyrighted materials including: Advertising; Music; Books; Booklets; Computer software;Other creative material

Regulation by State Government

Much media advertising falls into the category of interstate commerce and is therefore regulated by the State Government.

All states also have what have been referred to as Ў°little FTC actsЎ±, which govern unfair business practices. Under such acts, states themselves can investigate and prosecute the cases.

Regulation by Local Government

Many cities and countries, usually through consumer protection agencies, enforce laws regulating local advertising practices.

4) Non-Governmental Regulation

Self Regulation by Advertisers

Most large advertisers reflect a sense of social responsibility in their advertising.

Most large corporations have set up review systems for ensuring that ads meet their own standards as well as industry, media and legal requirements.

Better Business Bureau (1916, 100 000 member companies) – operates and protect consumers against fraudulent and deceptive advertising and sales practices.

This bureau composed of:

Advertisers Agency

Media representatives Lay people

Regulation by the Media

Almost all media maintain some form of advertising review and reserve the right to reject any material they regard as objectionable, even if it is not deceptive.

Policies of three major networks (newspaper, magazine, TV) are all based on the original National Association of Broadcasters television Code

Self Regulation by the advertising Profession

Many advertising agencies monitor their own practices.

Advertising publications actively report issues and actions before the courts in an effort to educate agencies and advertisers about possible legal infractions.

National Advertising Review Council

NARCЎЇs primary purpose is to promote and enforce standards of truth, accuracy, taste, morality, and social responsibility in advertising.

Under NARC were established 2 regulatory divisions:

National Advertising Division (NAD)

National Advertising Review Board (NARB)

NAD	NARB
1. It monitors advertising industry practices. 2. It reviews complaints received from consumers and consumer groups, brand competitors, local Better Business Bureau	It uses advertising to encourage consumers to report ads they think are misleading, untruthful or deceptive.

NAD / NARB Resolution Process

Advertiser / NAD dialog

1. Decision that claims are substantiated Ўъ NAD case report: advertising substantiated

2. Advertisers agrees to make appropriate changes Ўъ NAD case report: advertising modified or discontinued

3. Advertiser and NAD disagree Ўъ NAD case report: advertising referred to NARB

Advertiser and NAD disagree

1. NARB chairman disapproves/approves request for appeal

2. NARB panel hears appeal

3. Panel decision (NAD upheld/modified/reserved) Ўъ NARB report

4. Advertiser declines to accept decision

Ўэ

Publish referral to government agency

Regulation by Consumer Groups

Consumer Protection Organization starts its activity in 1960s.

Consumer movement began to play an increasingly active role in fighting fraudulent and deceptive advertising.

The growth of consumer movement has caused advertisers and agencies to pay more attention to product claims.

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