Advertising Regulation

ETHICAL ISSUES

Ethics are moral principles and values that govern the actions and

decisions of an individual or group.

Issues of manipulation, taste and the effects of advertising on values and

lifestyles.

Certain ads may be permitted by law but still be unethical.

Overt use of sex appeals and nudity in ads.

Misleading information and deception in advertising.

In India, Advertising Standards Council of India (ASCI) a self-regulatory

body, enforces the ethical code for advertisers. It also seeks to achieve fair

advertising practices in the best interests of the consumer.

Processing of Complaints at ASCI 1. Complaint is received by ASCI along with specimen or description of the offending ad

2. Advertiser and / or agency asked to comment on complaint and submit substantiation where

necessary

3. Substantiation received

4. Consumer Complaints Council considers complaint and reply

5. Consumer Complaints Council considers investigation report

6. Complaint held by CCC or Complaint not upheld by CCC

7. Assurance sought by ASCI from advertiser to withdraw advertisement

8. Assurance received 9. If assurance not received

10. Agency / media asked not to carry

advertisement

11. CCC’s decision and follow-up by ASCI conveyed to complainant

GUIDELINES OF ASCI

To ensure the truthfulness and honesty of representations and claims

made by the advertisers and to safeguard against misleading advertising.

To ensure that advertisements are not offensive to generally accepted

standards of public decency.

GUIDELINES OF ASCI (cont.)

To safeguard against indiscriminate use of advertising for promotion of

products, which are regarded as hazardous to society or to individuals to a

degree or of a type, which is unacceptable to society at large.

To ensure that advertisements observe fairness in competition so that the

consumers’ need to be informed on choices in the market-place and the

canons of generally accepted competitive behaviour in business both are

served.

ASCI – CODE OF CONDUCT

Ad should not be indecent or obscene

Gambling is prohibited

Ads must be honest and truthful (must not be misleading)

Ads must be protected from copying

Ads must not be against moral sense

It must conform to principles of fair competition

Ads must not conflict social behaviour

Prohibit ads which exploit national emblem or any part of the constitution

Use of celebrities should be limited

No ad should be presented as news

Advertising Regulation

Advertisement

Audience

Protection

Legislation

Organized

Groups Social

responsibility

Media

Groups

Government

Agencies

Guidelines for Comparative Advertising

The intent of the advertisement should be to

inform and never to discredit or unfairly attack

competitors, competing products or services.

When a competitive product is named,it should

be one that exists in the market place as

significant competition.

The Ad should never use partial results or stress

insignificant differences.

Deceptive and Unfair advertising Remedies

1.Consent decrees

The regulating agency simply notifies the

advertiser of its finding and asks the advertiser

to sign a consent decree

2. Cease- and- desist orders

Uses when the advertiser refuses to sign the

decree.

Issues an order that is similar to a court trial

The judge issues an order requiring the

respondents to cease their unlawful practices.

3. Corrective advertising

The agency orders the offending person or

organization to produce messages for

consumers that correct the false impressions

the Ad made.

The purpose of corrective advertising is not to

punish an advertiser but to prevent it from

continuing to deceive consumers.

4. Substantiating Ad claims

Advertisers need to validate any claims

when requested by the commission.

It is the responsibility of the advertiser

to show the reasonables of the claim.

5.Consumer redress

The agency or the commission can order

any of the following.

Cancellation of contracts

Refund of money

Return of property

Payment of damages

Public notification

6. Hold the Ad agency legally responsible

An agency is liable for deceptive

advertising along with the advertiser

when the agency was an active

participant in the preparation of the ad

and knew or had reason to know that it

was false or deceptive.

7. Regulation by consumer groups

Consumerism

8. Self –regulation

Advertiser also regulate themselves

Many industries maintain advertising

codes that companies agree to follow

What is the Economic Impact of Advertising?

Advertising: Adds value to products Keeps prices competitive Increases consumer demand

Primary demand Secondary demand

Stimulates the economy Encourages new products

The Abundance Principle: Advertising keeps consumers informed Advertising allows companies to compete more

effectively

What is the Social Impact of Advertising?

Truth in Advertising: Puffery

Refers to exaggerated, subjective claims that can’t be proven true or false

The subliminal myth

Unfair and Deceptive Practices:

False promises Incomplete description False and misleading comparisons Bait-and-switch offers Visual distortions False testimonials Partial disclosure Small-print qualifications

Ethics in Advertising

Ethical dilemma is: Any unresolved interpretation of an

ethical issue

Ethical lapse is: A clear case of illegal behavior

Consumerism is: Social action to dramatize the rights

of the general buying public

Social responsibility is: Doing what society views as best for

the welfare of the people in general or for a specific community of people

What is Unfair Advertising?

Unfair advertising occurs when:

A consumer is unjustifiably injured

There is a violation of public policy

There are unsubstantiated claims

Vulnerable groups are exploited