Advertising 7
Ethical Problems of Advertising Agency Executives
Shelby D. Hunt Lawrence B. Chonko
A mail survey reports on ethical pToblems faced bj 330 advertising agency executives. The most frequently cited difficult ethical problem is "treating clients fairly." Creating honest ad- vertisements and representing; clients whose products or services are unKealthji or not needed luere also frequently mentioned. Many agency executives reported that such ethical problems ajfect both their performance and their relationships with co-workers.
Shelby D . Hunt (Ph.D., Michigan State University) is Paul Whitfield Horn Professor of Marketing, Texas Tech University.
Lawrence B. Chonko (Ph.D., University of Houston) is HoUoway Professor of Market- ing, and executive director, Center for Professional Selling and Sales Management, Baylor University.
Members of all professional occupations are sometimes confronted with situations posing ethical or moral problems. In fact, the ethical problems confronting medical practitioners are so extensive and difficult that they devote the contents of an entire scientific journal (the journal of Medical Ethics) to exploring them. Although there is no Journal of Advertising Ethics, members of the advertising profession are both faced with, and concerned about, the subject of ethical standards. Like other professions, one way this concern manifests itself is in developing advertising codes of ethics to serve as guidelines for ethical conduct. The development and enforcement of such codes is a key criterion for a vocation to be accorded the status of "profession" (4).
Obviously, a code of ethics cannot be effective unless it addresses a profession's important ethical issues. Surprisingly, recent studies have found that several professions have codes of conduct that apparently fail to address their members' most significant ethical problems. For example. Hunt, Chonko and Wilcox (7) found that of the twelve most difficult ethical problems reported by practicing marketing researchers, only four were specifically addressed in the American Marketing Association's code of marketing research ethics. A study of marketing managers had similar findings (3).
The purpose of this article is to explore ethical issues in advertising by iden- tifying the major ethical problems actually confronting advertising agency exec- utives. Hopefully, by identifying these major ethical problems we can encourage and foster future research efforts on this important area. Thus, our efforts are meant to be suggestive, rather than conclusive. We also examine the practical consequences of these ethical problems from the standpoint of the individual advertising agency.
Many writers have pointed out the feelings of distrust about ethical issues in advertising held by both business people and the general public (5, 6, 8, 12, 13, 17). However, very few studies have sought the perspectives of practicing adver- tising professionals on ethical issues. A notable exception is the study of Krugman and Ferrell (9) which explored the reactions of both corporate and agency ad- vertising practitioners to a set of organizational practices. Their study focused on the extent to which the practitioners believed that the organization practices were unethical, compared with what their peers and top mangement would believe.
©Journal of Advertising Volume 16, Number 4, 1987, Pages 16-24
T h e Krugman and Ferrell study found that respondents believed them- selves to hold significantly higher eth- ical standards than their peers and that the beliefs on ethics of practitioners working for advertising agencies were very similar to their corporate coun- terparts. Rather than focusing on the extent to which practitioners believe that certain practices are perceived to be ethical or unethical, our study at- tempts to delineate the actual ethical problems confronting advertising prac- titioners and the implications of these problems for advertising management.
To a certain extent, the present ar- ticle can be viewed as a natural follow- up to the RotzoU and Christians study (16). Their research also used open- ended questions, asking whether agen- cy practitioners "encountered ethical decisions in the practice" of their jobs and, if so, to identify the "types of sit- uations" where they encountered the "most important of these decisions." They found that ethical problems with the content of advertising messages and agency/client relationships predomi- nated. Our study differs from theirs in that they surveyed four advertising agencies and had a total sample size of 123. Further, their respondents con- tained an unidentified number of cler- ical, rather than managerial, personnel. In comparison, our study surveys a broad range of advertising agencies, as indicated in Table 1, and focuses heav- ily on higher-level positions within those agencies, with 269 executives re- sponding to the open-ended question.
A mail survey of advertising agency executives was undertaken to investi- gate these issues. This paper discusses, in detail, the survey methods used, re- sults, and implications of the research.
Method
The data reported here come from a self-administered questionnaire on eth- ical issues in advertising mailed to 3,064 advertising agency executives. T h e mailing list was secured from a com- mercial source. As is well known, the attrition rate on such lists can be as high as 36 percent if the list has not
been updated within a year (11). Also, different commercial sources vary in the frequency with which they update their lists. Another study on ethics, using the same mailing list source as the pres- ent research, found an attrition rate of 35 percent for a similar group of professionals (19). Vitell randomly called 100 names from a list and found that 35 of these individuals were un- available for a variety of reasons such as leaving the organization and the or- ganization no longer being in existence. Therefore, the best estimate of the ef- fective universe in this study is 1,992, that is, 65 percent of 3,064. The final set of mailings included a pre-notifica- tion postcard sent one week prior to the questionnaire, followed by a packet containing the questionnaire, a cover letter, and a stamped, pre-addressed re- ply envelope.
, , . ethical problems with the content of advertising messages and agency/client relationships predominated.
A total of 330 usable questionnaires were returned, representing a response rate of 17 percent. As would be ex- pected, the fact that much of the ques- tionnaire dealt with the issue of ethical problems in advertising significantly af- fected the overall response rate. Other published studies using questionnaires on ethical issues have experienced sim- ilarly low response rates (6,9). The top- ic of ethics is such a sensitive issue that many business people are extremely re- luctant to respond to questionnaires that deal, even peripherally, with this issue. O n the other hand, as a reviewer of this manuscript pointed out, ethics may be "of such little concern" to ad- vertising executives that they would not respond to questionnaires on the topic.
A second factor contributing to the low response rate was the fact that the
study was targeted at top-level adver- tising executives. As Table 1 shows, more than 60 percent of our sample came from advertising executives hold- ing the title "vice president" or above. Such individuals are less likely than the general population to respond to mail questionnaires; yet there is no proce- dure other than a mail questionnaire that would be cost-effective for gath- ering an analysis sample of the size and quality generated by this study Table 1 also shows that, although the sample is weighted toward upper-level man- agement, respondents span a wide range of ages, incomes and other back- ground characteristics.
O n the income dimension, our sam- ple corresponded well with a much larger study reported in Advertising Age (1). Their study of more than 1,600 ad- vertising executives found that 16 per- cent earned over $100,000 a year, 42 percent earned between $50,000 and $100,000 per year, and 42 percent earned less than $50,000 per year. The comparable statistics for our sample were: 17 percent, 34 percent, and 49 percent respectively.
Similarly, regarding size of firm, our sample corresponds well with industry data. In the "U.S. Advertising Agency Profiles: 1987 Edition," published by Advertising Age (18), the following were percentage categories on size of firm for the top 500 ad agencies:
1 employee - 0 percent 2-9 employees - 0.4 percent 10-19 employees - 22 percent 20-49 employees - 26 percent 50-99 employees - 18 percent 100-249 employees - 18 percent 250-499 employees - 4 percent 500-999 employees - 3 percent 1,000 or more employees - 3 percent
There are about 100,000 people em- ployed by 8,000 agencies in the U.S., an average of 12.5 employees per firm (15). In the Advertising Age top 500 sur- vey, all firms in the fifth 100 employed fewer than 35 people. Each firm ranked 501 to 8,000, then, is likely to employ few people. Their inclusion in size of firm calculations would, no doubt, reduce the size of firm percentages
17
in the Advertising Age survey for all firms employing 50 or more. Similarly, the percentage of firms employing nine or fewer people would greatly increase. In other words, a survey of all 8,000 ad agencies would yield size of firm re- sults consistent with those reported in Table 1.
As a check for possible response bias, following the procedure suggested by Armstrong and Overton (2), the re- sponses of early respondents (the first 67 percent of returns received) and late respondents (the last 33 percent) were compared using t-tests. Variables ex- amined included number of years with present company, years in current job, total years of business experience, in- come, age, education, and size of the firm. No statistically significant differ- ences were found between early re- sponders and late responders on these variables. Nevertheless, although our analysis sample is reasonably large, readers are cautioned to view the re- sults of our study as exploratory in na- ture and only a useful "first step" toward investigating these issues.
Results
The advertising agency executives were asked to respond in an open-ended manner to the following question:
In all professions (e.g., law, med- icine, education, accounting, ad- vertising, etc.), managers are exposed to at least some situations that pose a moral or ethical prob- lem. Will you please briefly de- scribe the aspect of advertising that poses the most difficult ethical or moral problem confronting you in your daily work?
This question is similar to the one used by Hunt, Chonko and Wilcox (7) in their study of the ethical problems of marketing researchers. T h a t re- search found that many marketing re- searchers (mistakenly) believed the purpose of the inquiry was to single out the respondents as being unique in having ethical problems. Thus, both the Hunt, Chonko and Wilcox study and the present research used the first sen-
tence in the question in an attempt to "desensitize" the subject matter for the respondents.
A total of 269 executives responded to the question for an item response rate of 82 percent. This response rate is much higher than the 55 percent ob- tained in the Hunt, Chonko and Wil-
cox study. Two judges independently coded the responses into categories, with a 96 percent interjudge reliability. Table 2 shows the categories of ethical problems in rank order. The most often reported ethical problem was "treating our clients fairly," followed by: (2) cre- ating honest, nonmisleading, socially
TABLE 1 Characteristics of Respondents
Job Title Percent^ C.E.O., Chairman, Owner,
President, Senior Partner Executive VP., Senior VP.,
General Manager of a Division V P . , V P of a specialized
area. Senior director of a specialized area
Director, manager
Assistant-Associate Director, Manager
37
14
18 21
4 Professional Nonmanagement (A/E's,
media schedulers, creative Nonprofessional Non-managerial
Size of Firm (number of employees) 1
2 to 9 10 to 19 20 to 49 50 to 99
100 to 249 250 to 499 500 to 999
1,000 or more
Education Level No college Associate (AA) Bachelor Master Doctorate
Major Field of Study Advertising Business (includes marketing) Communications (includes mass
communications, journalism and speech)
Art (includes graphic design) Humanities and social sciences Technical (e.g. engineering) Other (e.g. education)
"Percentages may not add to 100% du(
6 1
1 29 18 29 11 8 1 1 2
13 2
64 21
1
14 13
17 16 29 6 4
: to
Income
Less than $10,000 $10,000 to $19,999 $20,000 to $29,999 $30,000 to $39,999 $40,000 to $49,999 $50,000 to $59,999 $60,000 to $69,999 $70,000 to $79,999 $80,000 to $89,999 $90,000 to $99,999 $100,000 or more
Age 19-29 30-39 40-49 50-59 60 or more
Sex Male Female
Marital Status Married Single
rounding
Percent"
2 6
15 17 9
11 9 6 4 4
17
11 29 28 18 12
74 26
80 20
18
desirable advertisements; (3) represent- ing clients whose product/services are unhealthy, unneeded, useless, or unethical; (4) treating suppliers, ven- dors and media fairly; (5) treating em- ployees and management of agency fairly; and (6) treating other agencies fairly.
Before discussing each ethical issue, we should note that 15 percent of the respondents reported that they had "no" ethical problem that was "most difficult." Obviously, interpreting such a response is somewhat speculative on our part. As pointed out by a reviewer of this manuscript, it could reflect such a harmonious ethical environment in
the organization that ethical problems do not surface. Finally, it may reflect a simple unwillingness to share with us their ethical problems. Any of these interpretations (among others) may be placed on the "no problem" response.
Treating Clients Fairly. The most fre- quently cited ethical problem con- fronting our sample of advertising agency executives concerned treating their clients in a fair and equitable fash- ion. Ethical issues related to billing clients and balancing clients' needs against agency needs predominated in this category. The following situations revealed by a marketing director, two
presidents, a vice president, and a me- dia buyer, respectively, are representa- tive of specific ethical problems in billing:
Charges to clients. It is almost al- ways a judgment call as to what is a legitimate mark-up when prod- ucts exceed budget. Our fault? Client's fault? All too often the de- cision becomes "what the traffic will bear." Not a happy solution.
Having clients pay for our or oth- er's errors.
The main ethical question I face daily is whether or not I'm giving
TABLE 2 Ethical Problems of Advertising Agency Executives"
Problem
1. Treating clients fairly.
2. Creating honest, non- misleading, socially desirable advertisements.
3. Representing clients whose products/services are unhealthy, unneeded, useless, or unethical.
4. Treating suppliers, vendors and media fairly.
5. Treating employees and management of agency fairly.
6. Treating other agencies fairly.
7. Other.
8. None.
Overall
Responses
No.
80
66
34
25
15
7
11
43 281
%
28%
24
12
9
5
2
4
15
99%
Frequency of Occurrence""
Mean' S.D.
3.5
4.4
4.1
4.0
4.1
4.3
2.5
—
4̂ 0
2.7
1.8
2.0
2.1
2.1
2.1
2.1
—
%«
40%
44
45
41
33
57
18
—
43%
Effect on Performance
Mean'
5.1
5.2
4.7
5.8
5.2
5.1
5.5 —
5̂ 2
S.D.
1.8
1.9
2.1
1.7
1.8
1.9
1.5
—
c
% •
63%
67
61
82
60
57
64
—
65%
Effect on Co-Workers'"
Mean'
5.0
5.4
5.2
5.5
4.7
6.5
5.9
—
52
S.D.
1.9
1.7
2.0
2.1
2.1
0.8
1.7
—
%«
62%
70
65
73
53
100
73
—
67%
Top
Mean'
3.7
3.6
3.9
4.5
4.8
4.0
4.3
—
I9
Management Concern'
S.D.
2.2
2.1
2.2
2.4
2.4
2.0
2.5
—
%•
38%
38
45
59
60
43
60
—
44%
Response to open-ended question: "In all professions (e.g., law, medicine, education, accounting, advertising, etc.), managers are exposed to at least some situations that pose a moral or ethical problem. Would you please briefiy describe the aspect of advertising that poses the most difficult ethical or moral problem confronting you in your daily work?" Two judges independently evaluated the issues, resulting in a 96% interjudge reliability.
Though respondents were asked to describe only one ethical problem, 12 respondents described two coequal problems. Therefore, n is the number of problems described by all valid responses (i.e., 269 respondents described 281 problems (n = 281)).
To what extent does the ethical problem you described occur?
To what extent does the problem negatively affect your job performance?
To what extent does the problem negatively affect your relations with your co-workers?
To what extent is top managment concerned about the problem?
Mean of a seven point scale with 1 = "very little" and 7 = "a great deal." The means across problem areas are not significantly different by ANOXA "F" test.
Percent responding " 5 " through "7."
19
my company and, in turn, my clients their money's worth of ef- fort. Am I using my time most ef- ficiently? Am I spending the client's money wisely or in fancies of mine?
Doing personal work for a client and having them tell me to invoice his or her company for it.
Sometimes it is tempting to delib- erately understate the cost of a project in order to get approval to go ahead. The client may then be billed for a substantially higher amount once the work is com- pleted.
In addition to billing problems, many executives pointed out that they had difficulty balancing the needs of the client against the needs of the agency. One respondent simply indicated "re- sponsibilities to client versus respon- sibilities to my firm" as his most difficult problem. A company president dis- cussed the issue and how he handled it:
The most consistent is the problem of balancing value delivered to a client with potential gain to the agency. We get three bids and give the client the low bid supplier rather than "what the market will bear." Some firms might ask for three bids from more expensive printers or suppliers to get around this. We get genuine bids from suppliers whose experience and equipment best suit them to the job and who we know from past experience can deliver an accept- able job for an acceptable price.
Finally, many of the conflicts did not involve balancing the interests of the client versus the interests of the agency. Rather, they involved balancing the true interests of the client against the clients' own perceptions as to their best inter- ests. A creative director put it: "Doing what is creatively best versus what the client or account execs want." Some- times, the only way respondents saw to handle this problem was to lose some business. Laments an executive: "I rec-
ommend to my clients what I believe is best for them—regardless. This often means I don't get the business."
. . . many executives pointed out that they had difficulty balancing the needs of the client against the needs of the agency.
Creating Honest, Nonmisleading, Socially Desirable Advertisements. The second-ranked ethical problem in- volved the desires of advertising profes- sionals to create honest, nonmisleading and socially desirable advertisements. Often the problem centered on not wanting to mislead the public concern- ing characteristics of the product or its price. One respondent indicated that "in retail advertising, we rely on our clients to provide honest price infor- mation. Many times disclaimers are not used because they detract from the ap- peal of a sale." A creative director dis- cussed the issue of product quality:
Presenting a product in its most favorable light when it is inferior to its competition. Loyalty to the client requires that we do our best to persuade consumers to buy Our own integrity requires that we not mislead. This situation is fraught with temptation to be unfair to either the client or the consumer.
Several executives believed that gen- der and racism were their most difficult problems. Another creative director objected to industrial marketing ac- counts that insisted on "women in shorts and t-shirt holding a can of oil!" A senior vice president cited his major problem as "convincing a bigoted client that his promotion should include eth- nic people."
Finally, an art director noted that be- coming expert in the use of persuasive
techniques implied a social responsi- bility to use his skills carefully. He pointed out:
The most difficult [problems] are also the most subtle. As your knowledge of your craft grows, there is a temptation to subtly ma- nipulate people rather than to sway them with real information on specific benefits. Knowing what is the dividing line between the way a benefit is presented, and what is a manipulative "come on" is a tough judgment call some- times. We tend to be very con- servative and let others do the suede shoe routine.
Unethical Products. The third cate- gory of ethical problems concerned representing clients whose products/ services are unhealthy, unneeded, use- less, or unethical. Representing tobac- co companies, liquor companies, and political candidates were mentioned most often as posing ethical problems, followed by such clients as "junk food" producers, defense contractors, nucle- ar power producers, fashion furriers and abortion clinics. Several respond- ents said they were in the fortunate position of being able to "pick and choose" their clients. Others believed they had to "grin and bear it."
One art director pointed out that he was going to leave his agency, partly to avoid doing liquor advertising:
I work on liquor advertising for a major client and feel we prey on peoples' insecurities and desires for "happiness" by communicat- ing thoughts like "If you drink the right kind of liquor people will re- spect you, like you, you'll make it with the girls and/or guys—you'll be happy." I personally think there are no redeeming values to drink- ing and have a big personal prob- lem with working on liquor. (I did not think of any of this when I started at the agency). I am leaving this agency in two days partly to get away from liquor advertising . Beyond liquor specifically, I think we daily mislead people. We daily
20
try to get people to feel they must have things they don't need or want. I am ohviously very hoth- ered hy my profession—hut I'm 44 years old and don't have the nerve to make a career switch. So I'll just keep going [while] resist- ing doing dishonest ads as much as I can.
The kinds of concerns executives have ahout political candidates were exemplified in this statement by a hoard chairman:
There have heen situations re- garding political candidate clients when the client, whose business we had agreed to take, was not the "product" we assumed. In this sit- uation, we have heen placed in a position of writing and producing advertising for a "product" we did not helieve in. Because we had ac- cepted the assignments, we felt an ohligation to finish them and did. We later established a policy of not accepting political candidates. I wish every agency could afford to do the same.
Many respondents did not single out a particular product category. Rather, they were troubled about the social de- sirability of products in general and their work. A president/creative direc- tor commented:
One of the most difficult ethical problems is deciding whether the product or service we advertise really will contribute to the wel- fare of the prospective user, or whether we are simply ruhbing coins together. . . . Does what we do—advertising—contribute to the social good of mankind? Will we indeed—through this work— leave the world better than we found it? In my observation and experience, very few employees below the very top level of the company really have ethical or moral problems that could not he solved quickly by leaving that company; what they lack is the guts to do so. Most of them prefer to stay and take the money and
whine about "their" immorality. As Camus said, "Men suffer. Fools talk. Man acts." You can do almost anything you want to do, provid- ing you are willing to accept the consequences. I have, many times.
Several executives believed that gender and racism were their most difficult problems.
Treating Suppliers, Vendors and Me- dia Fairly. Advertising agencies exert great influence over the disbursement of their clients' money. They are charged by their clients with the re- sponsibility of objectively choosing various suppliers, vendors and media. Ethical problems in doing so constitute the fourth major category Prohlems in dealing with gifts, bribes, lunches, kickhacks and entertainment predom- inated. Interestingly, this category of problems was the number one category in a study focusing on marketing man- agers (3). The following two comments hy a media director and a comptroller are representative:
I would cite concern over "de- gree" to which agency personnel should accept "gifts," "favors," lunches, entertainment and en- tertainment from media [repre- sentatives]. I could rationalize that any amount appropriate, provid- ing it does not compromise agen- cy/client needs, but how would you c o n t r o l ? . . . In general, we ac- cept small (under $25.00) gifts and participate in trips, functions where others are included—other agencies, clients, etc. I have never encountered overt attempts to "buy the business."
The difficulty I run into is in re- gard to suppliers; namely, print- ers. Since I am frequently the person to make such decisions on
how to spend the clients' printing hudget, I find myself sometimes playing favorites with vendors. Some are friends [and] because of personal relationships, I don't al- ways make ohjective choices, par- ticularly when the job is an especially desirable one. I've once been offered (and rejected) a siza- ble kickback by a printer. It is easy to see how people could find such an offer attractive enough to ac- cept, and I'd imagine the practice is fairly prevalent.
Treating Employees and Mangement of Agency Fairly. The fifth category of ethical problems included situations that are common to all businesses, not just advertising agencies. These includ- ed ethical problems in the hiring and firing of employees, counseling incom- petent co-workers, handling expense accounts, putting up with "business politics," and the ethics of "free-lance" fees. One vice president/account su- pervisor descrihed his dilemma as to the kinds of projects to assign specific employees:
Often I have employees that do not agree with my own assessment of our clients and their products. This puts me on the horns of a dilemma (since we do a great deal of work for political candidates as well as general corporate work) whether to force the individual employees to work on the account and let them suffer (as well as their work), or not make them work for candidates and jeopardize their position with the agency, or to let employees decide what they want to work on at all. What comes first, the client, the agency, or the em- ployee's own political views?
Treating Other Agencies Fairly. The final category (other than the problems that were not classifiable and those who responded "no ethical problems") con- cerned treating other agencies in a fair and equitable manner. The most com- mon concern was plagarism. An agen- cy president indicated that his most difficult problem was the "pirating of
21
ideas, clients, information, and em- ployees." Tampering with the accounts of other agencies was a second com- mon response. A senior vice president stated: "We make it a policy not to tamper with accounts that are appar- ently happy with their present ad agen- cy. However, several competitors routinely call our clients and the clients of other agencies using the standard greeting of'I hear you're unhappy with your agency.'"
Frequency of Ethical Problems. Re- call that the executives were respond- ing to the following question: "Would you please briefly describe the aspect of advertising that poses the most dif- ficult ethical or moral prohlem con- fronting you in your daily work?" Even though we included the phrase "daily work," it is possible that respondents' "most difficult" ethical problem might be a single incident or a situation that rarely occurs.
To explore the frequency with which the executives confronted their "most difficult" problems, respondents were asked (on a seven-point scale with 1 = "very little," and 7 = "a great deal"): "To what extent does the ethical prob- lem you described [above] occur?" Table 2 shows the frequency of occur- rence for each problem area, identified by means and percentages. An analysis of variance test showed that the means across the seven major problem areas were not significantly different. There- fore, the six categories of ethical proh- lems can be treated as a single group with respect to frequency Further, the reader should be mindful that these re- sults must be interpreted in a percep- tual fashion, rather than numerically For example, one cannot make claims like "this problem occurs for this re- spondent once a week or more." Over- all, 43 percent of the responses were in the five to seven range, with seven indicating that the problem occurred "a great deal." These results definitely show that in each prohlem area a suh- stantial number of respondents per- ceive their most difficult prohlem occuring with a frequency significantly beyond the mere "isolated incident."
Consequences of Ethical Problems. Most research and commentary on ethics focuses on the consequences of advertising on society or certain sub- groups in society (e.g., children). For example, Pollay (14) reviews and dis- cusses the charges that advertising fos- ters materialism, reinforces negative social stereotypes, trivializes language, promotes consumer anxieties, and suh- verts our language. However, the po- tential consequences of ethical prohlems on the advertising agency have been largely ignored.
An agency president indicated that his most difficult problem was the "pirating of ideaS) clients, information, and employees."
Do the ethical conflicts confronting advertising executives impact solely on society? Or are there negative conse- quences for their own agencies as well? We asked respondents two questions on this issue. First, "To what extent does the problem negatively affect your job performance?" Second, "To what extent does the problem negatively af- fect your relations with your co-work- ers?" Table 2 shows the results for both of these questions. Again, analysis of variance tests indicated no significant differences, suggesting that all the re- spondents may be treated as a single group for each question.
The results show that two thirds of all respondents believed their ethical problems negatively affected both their job performance and their relation- ships with their co-workers. Clearly, these are sohering findings for those who perceive the entire question of ethics to be a societal, rather than man- agerial, concern.
Top Management Concern. Almost all writers on the suhject of husiness ethics agree that the support and ac- tions of top management are absolutely essential for the successful promotion of ethical conduct within any organi- zation. In a study on the ethical proh- lems of marketing researchers. Hunt, Chonko and Wilcox (7:319) found that "the actions of top mangement in re- primanding unethical behavior can sig- nificantly reduce the ethical prohlems of marketing researchers." A compa- rable study on marketing managers (3) came to the same conclusion.
To explore this issue, we asked: "To what extent is top management con- cerned about [your most difficult eth- ical] problem?" Table 2 shows that "only" 44 percent of the sample be- lieved that top management in their agencies had a high degree of concern about the respondents' ethical prob- lems. We use the adjective "only" be- cause 37 percent of our sample were chief executives officers, chairmen, owners, presidents and senior partners who are themselves "top management!" Nevertheless, we believe the 44 per- cent figure should be interpreted with caution. Specifically, this finding does not mean that only 44 percent of the executives helieved that top manage- ment was significantly concerned about the general issue of maintaining high ethical standards. It could well be the case that members of top management were very concerned about ethics, but not (yet) greatly concerned about the "most difficult" ethical problem con- fronting particular respondents. Fur- ther, even if top management were in fact concerned about the respondents' "most difficult" ethical problems (con- trary to respondents' perceptions), the misperceptions of respondents would be a genuine problem for top mangement. Finally, it could well be the case that a concern for general ethics by top man- agement (rather than specific issues) is all that can be reasonably expected. What can be "reasonably expected" of top management certainly warrants further research, as will be discussed in the next section.
22
Conclusion
Most studies on ethical issues in ad- vertising have either focused on the consequences of advertising on society or addressed the ethics of particular kinds of advertising (e.g., under what circumstances is comparative advertis- ing misleading?). A unique aspect ofthe present research has been its focus on the actual ethical problems confront- ing participants in the advertising in- dustry. To this end we explored the major ethical problems confronting ad- vertising professionals, using a sample of more than 300 advertising agency executives. Our findings warrant three tentative conclusions.
First, the number one "most diffi- cult" ethical problem confronting ad- vertising agency executives is treating their clients in a fair and equitable fash- ion. Specifically, the executives were very concerned about being fair in their billing procedures and equitably bal- ancing the interests of their clients against the interests of the agency The second set of problems centered on creating honest, nonmisleading, social- ly desirable advertisements, followed by: 3) representing clients whose prod- ucts/services were unhealthy, unneed- ed, useless, or unethical, 4) treating suppliers, vendors, the media fairly, 5) treating employees and management of agency fairly, and 6) treating other agencies fairly.
Note that only a minority (24 per- cent) of respondents indicated that something about advertisements per se resulted in their most difficult ethical problem. That is, only category two deals with the actual content of adver- tising . All other categories deal with relationships with clients, suppliers, media, other agencies, or the nature of the products being advertised.
The fact that most of the ethical problems do not deal with the actual content of advertising has implications for advertising codes of conduct. La- barbera (10) investigated 26 separate codes of ethics, including the codes of the four major industry associations: the American Advertising Federation, the American Association of Advertis-
ing Agencies, the Association of Na- tional Advertisers, and the Business/ Professional Advertising Association. She categorized the subject matter of each provision of each code into 28 different groups. Every category dealt with the content of advertising. Not a single provision in a single code ad- dressed the issues reported here as "most difficult" by 76 percent of our respondents. Therefore, we urge the major industry associations to give con- sideration to broadening the scope of their codes to address many of these issues.
The issue of ethics in advertising has historically been examined from a "ma- cro" perspective. That is, researchers and commentators have focused on so- cietal dimensions. Although this ori- entation has obvious merit, we believe the micro or firm-level orientation has been under-emphasized. Approximate- ly two thirds of our respondents in- dicated that their ethical problems negatively affected their job perform- ance and/or negatively affected their relationships with co-workers. There- fore, we conclude that the existence of ethical problems in an advertising agency can definitely affect agency per- formance. Ethical problems are man- agerial issues, not "just" societal issues!
The implications for the top man- agement of advertising agencies are straightforward. Note that only a mi- nority of our respondents indicated that top management was " c o n c e r n e d " about their ethical problems. Top man- agement in advertising agencies should become more concerned about the specific ethical problems their employ- ee confront and should adopt policies and procedures to help resolve such problems. By giving increased atten- tion to the ethical problems confront- ing employees, top management may mitigate the negative consequences found in our study. Thus, not only is it the "right" thing to do, our study strongly suggests it is good manage- ment as well.
The preceding conclusions must be tempered in light of the limitations of our study. Although our sample size is large by traditional social science stan-
. . . we conclude that the existence of ethical problems in an advertising agency can definitely affect agency performance.
dards, the effective response rate was "only" 17 percent. Given the repre- sentativeness of the sample, we believe reasonable generalizations can be drawn. Nevertheless, others (adopting essentially a "political polling" per- sepctive on response rates, rather than a social science perspective) may sus- pect otherwise. Such legitimate con- cerns reemphasize the desirability of replication for studies such as ours. In- sisting that each study dealing with complex social issues such as advertis- ing ethics achieve "political polling" re- sponse rates essentially means that no such study will be reported in the lit- erature. Rather, we believe, numerous replications of studies such as ours with reasonably attainable response rates with identified and representative sam- ple populations, represent perhaps the only feasable procedure for scientific progress.
Other limitations of this study in- clude the fact that all our measures were perceptual, rather than behavioral. That is, we measured perceptions of ethical problems and perceptions of the consequences of these problems on such things as performance and rela- tionships with co-workers. Such per- ceptions may or may not accurately represent actual problems and actual relationships. A final limitation is the fact that the study was not theory-dri- ven. Thus, no specific hypotheses were tested, though the results may form the basis for future theoretical work.
The results of this study suggest nu- merous fertile areas for additional re- search on ethical problems in advertising. Beyond the obvious sug- gestion that our findings be replicated.
23
we suggest that future research focus on examining in detail the specific eth- ical problems identified by our re- spondents. In particular, researchers may wish to develop scenarios about each problem area and explore how ad- vertising agency executives actually "solve" such problems. That is, what procedures and rules are used by ex- ecutives in the process of resolving eth- ical conflicts? In moral philosophy terms, are such rules and procedures primarily deontological or utilitarian in nature? Further, with respect to the ac- tions of top management, what should be the reasonable expectations of em- ployees as to the appropriate level of concern that top management should have for specific ethical problems? Fi- nally, our results have shown that pre- vailing codes of ethics in advertising do not address the ethical issues reported by our respondents as "most difficult." To what extent should these codes of ethics include the specific issues? Should such codes be purposively left at the general level, or be made very specific? Given the importance of eth- ics and ethical issues in any profession, such research efforts would seem to have high priority and value.
7. Hunt, Shelby D., Lawrence B. Chonko, and James B. Wilcox, "Ethical Problems of Marketing Researchers," Journal of Marketing Research, 21 (August 1984), pp. 309-24.
8. Kelly, J. Steven, "Subliminal Embeds in Print Advertising: A Challenge to Advertising Eth- ics," Journal o/Advertising, 8 (Summer 1979), pp. 20-24.
9. Krugman, Dean M. and O.C. Ferrell, "The Organizational Ethics of Advertising: Cor- porate and Agency Views," Journal of Adver- tising. 10 (Winter 1981), pp. 21-48.
10. Labarbera, P., "Analyzing and Advancing the State of Art of Advertising Self Regula- tion," Journal o/Advertising, 9 (Summer 1980, pp. 27-38.
11. Nash, E., Direct Marketing: Strategy. Plan- ning. Execution. New York: McGraw-Hill, 1986.
12. Nevitt, Terence, "The Ethics of Advertis- ing: HP. Bishop Revisited," International Jour- nal o/Advertising, 4 (1985), pp. 297-304.
13. Ossip, Al, "Ethics—Everyday Choices in Marketing Research," Journal of Advertising Research, 25 (October/November 1985), pp. RC10-RC12.
14. Pollay, Richard W., "The Distorted Mir- ror: Reflections on the Unintended Conse- quences of Advertising," Journal of Marketing. 50 (April 1986), pp. 18-36.
15. Rothschild, Michael L., Advertising. Lex- ington, Mass: D.C. Heath and Company, 1986, p . 2 L
16. RotzoU, Kim B. and Clifford G. Christians, "Advertising Agency Practitioners' Percep- tions of Ethical Decisions," Journalism Quar- terly. 57 (Autumn 1980), pp. 425-431.
17. Turk, Peter, "Children's Television Ad- vertising: An Ethical Morass for Business and Government," Journal of Advertising. 8 (Win- ter 1979), pp. 4-8.
18. "U.S. Advertising Agency Profiles: 1987 Edition," Advertising Age. March 26, 1987.
19. Vitell, Scott, Marketing Ethics: Conceptual and Empirical Foundations of a Positive Theory of Decision Making in Marketing Situations Having Ethical Content. Unpublished Ph.D. dissertation, Texas Tech University, 1986.
Received February ll. 1987. Revision ac- cepted for publication July 7, 1987.
References
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3. Chonko, Lawrence and Shelby D. Hunt, "Ethics and Marketing Management: An Em- pirical Examination," Journal of Business Re- search, 13 (August 1985), pp. 339-359.
4. Coe, Ted L. and Barbara Coe, "Marketing Research: The Search for Professionalism," in Marketing: 1776-1976 and Beyond, Kenneth L. Bernhardt, ed. Chicago, IL: American Mar- keting Association, 1976, pp. 257-9.
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6. Greyser, Stephen A. and Bonnie B. Reece, "Businessmen Look Hard at Advertising," Harvard Business Review, 49 (May-June 1971), pp. 18-26, 157-165.
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