Welcome!
Advertising Ethics and Regulations
Dr. Satyendra Singh
Professor, Marketing & International Business
University of Winnipeg, CANADA
Objectives
① Ethical, social, economic effects of ad
② Regulations
all links on the course website for more details
2
2
Is it misleading?
3
What you ordered
What you received
4
Blame Game
Misleading Advertiser Negligent Consumer
5
① Ethical
Deceptive
25% dishonest, puffery, excessive subjective praise
Offensive
bad taste, extreme fear/sex/shock appeal → attention eg AA AD
partial nudity, culture, religion, age, education → # complaints
Children
no cognitive defense, diff between ad and program…
need socialization, watch media anyway, parent-child relations not disturbed
6
6
7
Social
Materialism
not spiritual/intellectual, ↑social mobility, Maslow → BMW
Persuasion/information
not easy, 5-sec ad, so spend on ad, right to choose…
Women
traditional roles, housewife, changing roles, men cooking…
Visible minorities
over represented in lower roles, stereotyping…
8
8
9
Economic
↓Consumer Choice
Ad differentiator, ↑sell at ↑price, ↑$ for Ad
customers can choose at shelf, many NPD each year
↓Competition
↑barrier, MNC buy media in bulk at discount, so spend ↑Ad
↑quality, cannot ↑ price
Costs and Prices
Ad ↑perceived value, ↑sell at ↑price, ↑$ for Ad
↑economies of scale, offsets more than Ad costs
10
10
11
12
But, how serious is the injury if misled?
13
Advertising Principles of the �Association of Canadian Advertisers
Ad must behave responsibly
Ad have a right to freedom of speech
Ad support a vibrant, competitive economy
Ad contribute to the Canadian economy and culture
14
14
② Canadian Radio-Television and Telecommunications Commission (CRTC)
Mandate is to ensure that the Broadcasting Act and the Telecommunications Act are upheld throughout Canada.
Objective of each Act is to ensure all Canadians can receive broadcasting and telecommunications services.
Ensures Canadian content occurs in Canadian media
Areas for broadcasting where CRTC is involved: Ad time limits and signal substitution
15
15
Competition Act — prevents false or misleading Ad
Ensures compliance with the act rather than seeking punishment.
No false claims - Buy this vacuum and bags are free. Then $12 admin fee
No false impression - Drive away in a corvette for $39,000 but show the $50,000 on the ad
No double meanings - sales but not in quality
No contradictions - don’t pay until 20xx but fine print says except for taxes and freight of $750)
16
16
Ad Standards (AS)
Not-for-profit, self-regulatory industry body
Mandate is to create and maintain community confidence in Ad
AS Division
Administers industry’s self-regulatory codes
Handles complaints about advertising
Administers any disputes arising between advertisers
17
17
18
18
Canadian Code of Ad Standards
The Code describes what is not acceptable advertising
Intent is to provide standards for responsible and effective advertising without minimizing right of firms to advertise
Pertains only to content of ad
Does not limit promotion of legal products or demonstration of products for intended purpose
Does not supersede any other laws or regulations
19
19
Clauses of Canadian Code of Ad Standards
20
1 Accuracy & Clarity | 8 Professional/Scientific Claims |
2 Disguised Advertising Techniques | 9 Imitation |
3 Price Claims | 10 Safety |
4 Bait & Switch | 11 Superstitions & Fears |
5 Guarantees | 12 Advertising to Children |
6 Comparative Advertising | 13 Advertising to Minors |
7 Testimonials | 14 Unacceptable Depictions & Portrayals |
20
AS and Canadian Children’s Food and Beverage Advertising Initiative (CAI)
AS acts as the administrator for CAI.
Initiative is in response to obesity problem among children.
Marketers agreed to core principles for advertising directed to children under 12
21
21
CAI’s 5 Core Principles for Advertising to Children
Devote 100 percent of television, radio, print, and Internet advertising to furthering the goal of promoting healthy dietary choices and/or healthy active living.
Incorporate only products that represent healthy dietary choices in interactive games primarily directed to children under 12 years of age.
Reduce the use of third-party licensed characters in advertising for products that do not meet the CAI’s product criteria.
Do not pay for or actively seek to place food and beverage products in program/editorial content of any medium.
Do not advertise food or beverage products in elementary schools.
22
22
Gender Portrayal Guidelines
to ensure women and men are portrayed appropriately and equally.
6 overall clauses
Authority
Decision making
Sexuality
Violence
Diversity
Language
23
23
Complaint Process
3 streams
Consumer
Special interest group
Advertiser disputes
Step 1: Complaint is authenticated
Step 2: Complaint is evaluated for legitimacy
Step 3: Advertiser is contacted with opportunity to respond
24
24
Example of a Complaint
Two women passionately kissing in alcoholic beverage ad (113 complaints). Scene inappropriate for family viewing
Verdict -- Council agreed with the complain that the commercial offended standards of public decency. But it did not violate the code provided it was shown after 9:30pm
25
25
Conclusion
Most advertisers do not design their messages to be deceptive, or with intent to mislead or deceive
National advertisers invest great deal to create loyalty to and enhance image of brand
Companies would not risk losing the hard-won trust of consumers
26
26
Questions?�s.singh@uwinnipeg.ca