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Advertising_ch13edit.pptxLegal and Ethical Issues Affecting Advertising
Chapter 13
Advertising and Sales Promotion
©2013 Cengage Learning. All Rights Reserved.
Legal and Ethical Issues Affecting Advertising
13.1 Government Regulation
13.2 Self-Regulation
13.3 Ethics in Advertising
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CHAPTER 13
Advertising and Sales Promotion
©2013 Cengage Learning. All Rights Reserved.
ADVERTISING AND SALES PROMOTION
4/4/2018
CHAPTER 13
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13.1 Government Regulation
Early advertisers could get by claiming just about anything. Today, advertising is regulated at the federal, state, and local levels. Consumers must be protected against advertising that makes false or highly exaggerated claims.
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CHAPTER 13
Advertising and Sales Promotion
©2013 Cengage Learning. All Rights Reserved.
Legal Factors Affecting Advertising
Early days of advertising
Little or no legal restrictions
Misrepresentations, exaggerations, and outright lies
Today’s advertising
Regulated at many levels
Federal
State
Local
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CHAPTER 13
Advertising and Sales Promotion
©2013 Cengage Learning. All Rights Reserved.
Federal Legislation
Federal Trade Commission Act of 1914
Food and Drug Act of 1906
Food, Drug, and Cosmetic Act of 1938
Wheeler-Lea Act of 1938
Lanham Act of 1946
Cigarette Labeling and Advertising Act of 1965
Fair Packaging and Labeling Act of 1966
Nutrition Labeling and Education Act of 1990
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CHAPTER 13
Advertising and Sales Promotion
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Federal Legislation (continued)
Children’s Television Act of 1990
Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994
Children’s Online Privacy Protection Act of 1998
Do Not Call Registry Act of 2003
CAN-SPAM Act of 2003
Green Guides
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CHAPTER 13
Advertising and Sales Promotion
©2013 Cengage Learning. All Rights Reserved.
The Federal Trade Commission
The nation’s consumer protection agency
Government regulatory agency most directly involved in overseeing the advertising industry
Bureau of Consumer Protection
Protects consumers against unfair, deceptive, or fraudulent practices
Develops rules to protect consumers
Educates consumers and businesses about their rights and responsibilities
Collects complaints about consumer fraud and identity theft
Divisions
Advertising Practices Division
Marketing Practices Division
CHAPTER 13
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Advertising and Sales Promotion
©2013 Cengage Learning. All Rights Reserved.
Other Government Regulatory Agencies
Federal Communications Commission (FCC)
Food and Drug Administration (FDA)
Alcohol and Tobacco Tax and Trade Bureau (TTB)
United States Postal Service (USPS)
States and local agencies (FCC)
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CHAPTER 13
Advertising and Sales Promotion
©2013 Cengage Learning. All Rights Reserved.
13.2 Self-Regulation
Advertising industry’s attempt to regulate and control its actions.
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CHAPTER 13
Advertising and Sales Promotion
©2013 Cengage Learning. All Rights Reserved.
Advertising Industry Accountability
National Advertising Review Board (NARB)
Better Business Bureau (BBB)
Advertising agencies
Media organizations
Competition
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CHAPTER 13
Advertising and Sales Promotion
©2013 Cengage Learning. All Rights Reserved.
Consumer Awareness
National Consumers League (NCL)
Consumer Federation of America (CFA)
Federal Citizen Information Center (FCIC)
Consumers Union
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CHAPTER 13
Advertising and Sales Promotion
©2013 Cengage Learning. All Rights Reserved.
13.3 Ethics in Advertising
Identify the ethical aspects of advertising.
Explain how the FTC assures truth in advertising.
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CHAPTER 13
Advertising and Sales Promotion
©2013 Cengage Learning. All Rights Reserved.
13.3 Ethics in Advertising
The purpose of advertising is to encourage consumers to take some kind of action.
Can advertising be manipulative? Is there a power of persuasion?
Advertising compels consumers to take actions they would not otherwise take.
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CHAPTER 13
Advertising and Sales Promotion
©2013 Cengage Learning. All Rights Reserved.
The Ethical Aspects of Advertising
Advertising can be deceptive
Advertising can create needs and promote materialism
Advertising can be manipulative
Advertising can be controversial
Advertising can play on people’s fears and guilt
Advertising often targets children
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CHAPTER 13
Advertising and Sales Promotion
©2013 Cengage Learning. All Rights Reserved.
Truth in Advertising
FTC uses the following guidelines to determine if an ad is deceptive.
Reasonable consumer
Claims
express claim
implied claim
What the ad does not say
Material claims
Evidence to support the claims
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CHAPTER 13
Advertising and Sales Promotion
©2013 Cengage Learning. All Rights Reserved.
