Ethics E2

  1. Industry Self Regulation (1 of 4 main advertising regulation groups)
    • 1912: Council of Better Business Bureau
    • -protects against fraudulent and deceptive advertising at LOCAL level
    • -provides a code for advertising

    • 1971: National Advertising Division
    • -promotes standards for truth, accuracy, morality, and social responsibility in advertising
    • -monitors and reviews complaints.

    • National Advertising Review board (extension)
    • -handles appeals and sends unresolved cases to FTC
  2. Industry self regulation (MEDIA REGULATION AND AD ASSOCIATIONS continuation)
    • Broadcast standards department reviews scripts, storyboards or finished ads.
    • National magazines monitor all ads.
    • Good Housekeeping must substantiate advertisers claim
  3. FTC on Deceptive & Unfair Advertising
    Mission: Keep markets free from deception or unfair practices to 1) protect consumers, 2) maintain competitive marketplace.
  4. Deception means
    • An ad that is false
    • OR
    • An ad that is likely to mislead.
  5. Decpetion occurs when
    • 1) strengths are distorted
    • 2) significant weaknesses are ignored
  6. 3 key elements that make up the legal definition of deception:
    • an ad that contains a
    • 1) material misrepresentation, or omission
    • 2) thats likely to mislead
    • 3) a significant number of consumers acting reasonably to their detriment
  7. what is material misrepresenation or omission
    • consumer would have chosen differently if not for the deception.
    • the info in the ad directly impacts consumers choice.
    • misrepresented a key fact that could chance decision
  8. what is likely to mislead mean
    • can also be omission OR
    • ball and switch trick in which the seller tricked you to come in and then switched item they sell to you.
    • mock up
  9. Consumers acting reasonably evaluate...
    1) the susceptibility of the average target audience: considers intended target audience first (age.mental state). Will also consider orther groups reached

    2) the net impression: Understanding taken away by reader which will vary depending on target audience and assumptions of the time.

    varies by reasonable (1837) vs. ignorant man (1937) standard.
  10. Support for product claims require Substantiation which ...
    • 1. identifies objective claims/brands
    • 2. Assess net impressoi
    • 3 Review tests
  11. Level of substantiation varies by...
    • 1) nature of product advertised
    • 2) nature of claim made (must have solid support)
    • 3) nature of the consequence to the consumer
  12. How the FTC punishes deceptive and unfair claims
    • 1) consent decree: advertiser signs document to stop, but doesnt admit any wrong doing
    • 2) cease and desist order: prohibits use of ad
    • 3) corrective advertising: gives % of futre add budget to brand that got hurt. it also must reach a % of the target audience an average N number of times
  13. 5 common types of deceptive ads: (LICIT)
    • Literal untruth: "antiques"
    • Inadequate disclaimers: "re refined oil"

    Claims of uniqueness: prior substantiation "Lady Kenmore"

    Implication, inference, innuendo: no specific untruth, but net impression....

    Technical of foreign language: perfume case
  14. Deinition of Puffery:
    Subjective and/or overly exagerative statements or opinions with no way to test its claims are false

  15. When is the line for puffery blurred?
    • When the consumers take puffery as:
    • 1) factual or material claim by consumers resulting in a deceptive judgment.
    • 2) A material misrepresentation of information
  16. Puffery Vs. Deception, what is the difficulty?
    • its hard to tell what is puffery and what is an objective(testable) material claim.
    • Objective material claims need prior substantiation or need support or they will be considered puffery.

    Ford explorer: had superior claim which equals objective material claim and where dubbed deceptive bc they had no prior substantiation
  17. Product demonstration vs. deception
    • Avoid mockups unless demonstration doesnt illustrate a material claim.
    • Mistakes (campbells soup, volvo)

    disclaimer may overcome minor alterations.
  18. what is an endorsement?
    A consumer, celebrity or expert is depicted as supporting the product or service
  19. Testimonial?
    actual consumer providing their own opinion/testimony about the product or service

    substantiation requirements higher on testimonials because advertiser is asking audience to rely on consumers opinion and not the advertiser.
  20. spokesperson
    long standing representative for the product who is an ACTOR and gets PAID. these are seen as giving the advertisers opinion.
  21. copyright act of 1976/1998 (1790)
    secures authors the exclusive right to their original writings that are fixed in a tangible medium
  22. purpose of copyright act? (Leave, enemies, poor)
    • To allow for
    • 1) limited monopoly
    • 2) encourage and reward the creation of works
    • 3) while ensuring eventual public access
  23. how long is copyright act good for?
    original: 14 years + 14 more if author is still alive

    • 95 years for corps
    • 70 years after authors death
  24. what are benefits of copyright acts? to (Make Competitors Pay Rewards)
    • 1. make and distribute copies
    • 2. create adaptations
    • 3. publicly display and perform work
    • 4. recover damages
  25. what is a copyright?
    1) fixed in a tangible medium (can be percieved, not just thoughts)

    2) original work of author (distincly different from others in existence)

    • 3) writings include literary works, photos, pics.
    • writings dont include trademarks, patents, ideas (only the expression of an idea can be copyrighted)
  26. what is an idea? what is the difference between expression of an idea?
    Idea is an ad with two people chatting about a car

    expression: actual dialogue, setting, camera, angles, music so more complex
  27. 3 elements required to copyright work
    • 1) the symbolic C or copyright
    • 2) THe date of first publication
    • 3) the name of the owner

    within 5 years of first use should be registered with C office.

    copyrights are transferrible to children
  28. Fair Use Doctrine
    allows copying of copyrighted material without authors consent and or without paying for it
  29. what does fair use doctrine balance?
    • 1) authors rights for proctection of their work and
    • 2) publics right to information

    **doesnt protect advertisers tryign to use C material without paying (stock photos)
  30. what are two exceptions in which you can use copyrighted material?
    • 1. non commercial purposes: critcisms or social commentary
    • Includes mocking imitation, news reporting and teaching or research.

    2) copying for commercial purposes is often illegal but some commercial purposes are okay, but mostly just okay for comparative ads but must be honest and fair. also includes parody but it must make a biting comment, not just for attention or lack of new ideas.
  31. 4 court considerations in assessing if using a C work is ok under fair use
    1. purpose and character of using the work (commercial or non C)

    • 2. how unique is original copyright work?
    • 3. amount and similarity of copyrighted work used in new piece (in parody not an issue)
    • 4. Is the value of the original work diminished?
  32. punishment for copyright infringments (AID)
    • injunction and/or destruction
    • damages and profits
    • attorneys fees
  33. 3 steps to show infringment:( Cowards Steal Omens)
    • 1> copying without consent...
    • 2. a substanstial portion
    • 3. of an original expression
  34. THoughts on political advertising
    Should be stopped, its the only kind of dishonest advertising thats left. has more rights because its non commercial.
  35. comparative advertising:
    classical liberal beliefs in that its legal as long as its truthful and provides info that can help consumers make rational decisions
  36. main goal of regulation (2):
    • 1. Protects consumers from harm (physical and monetary)
    • 2. maintaines competitive market
  37. Regulation of advertising focuses on (2):
    acronym: (Placing Amphasis On Info)
    • 1. availablity of info
    • 2. presentation of info (content and method)
  38. what are the 4 main advertising regulation groups? (Mean Guys Insult Cuties)
    1. market system regulation. Is the invisible hand belief that in the long term the market will take care of itself (CL)

    2. government regulation. federal/state and FTC has most control

    3. industry self regulation. Ad associations and BBB and NAD

    4. consumer regulation. like PETA
  39. 4 things about FTC
    • 1. made in 1914
    • 2. classical liberal in that it creates fair competition between businesses
    • 3. national level of regulation
    • 4. old FTC was business to business but NOW its all about consumer rights.
  40. Laham Trademark Act
    regulates comparative advertising
  41. some federal regulators
    • FTC
    • Laham Trademark act
    • federal communication comission
    • patent and TM office
    • library of congress
  42. What is Federal Communication comission?
    • Regulates over broadcast industries
    • Regulates food, drugs, cosmetics- to ensure the safe and effective products and now tobacco since 09!!

    • Labeling and packaging focus, but impacts advertisers because now ingredients must be on product labels.
    • Also, drug ads must (97) indicate possible side effects and direct people to more information.
Card Set
Ethics E2