Advertising Law & Ethics : Codes of Ethics

•Ethics are systems of moral principles that help us determine right from wrong, good from bad.

Guidelines

•Adv. Carried shall be so designed as to confirm to the laws of the country & should not offend morality, decency & religious susceptibility of the views.

• Adv. Should not be directed towards religious politics :

• No ad. shall contain references, which are likely to lead the public to infer that the product advertised, or any of its ingredients has some special or Miraculous or supernatural property.

• No ad. which endangers the safety of children or creates in them any interest in unhealthy practices or shows them begging or in an undignified or indecent manner shall be carried out.

• Indecent, vulgar, suggestive, repulsive or offensive themes or treatment shall be avoided in all ads.

Regulatory Bodies :

•All ads. have to pass through the norms laid by the regulatory authorities.

•Regulations affect virtually every step in the advertising process, including protecting the product with a trademark, creating the message showing the product in action & announcing a specialsale.

• The following bodies (regulatory) provide an important check on advertisers, seeing to it that they do not advertise in ways that are deceptive or otherwise socially deceptive.

• Federal Trade Commission• Federal Communication Commission• Children’s adv. Review Unit• Food & Drugs Admin.• Adv. Review Council• Adv. Standard Authority

1) Federal Trade Commission

• Independent agency of US Govt. (1951) with an objective of KeepingAmerican competition free & fair. Has 5 jury members.

• Promotes competition through the enforcement of certain antitrust laws, to prevent the dissemination of false & deceptive advertising goods, drugs, curative devices & cosmetics.

• Enforces federal antitrust & consumer protection laws by investigatingcomplaints against individual companies initiated by consumer, business, inquiries or report in media.

• Ensures that nation’s markets function comparatively by eliminating unfair or deceptive practices.

2) FDA : under jurisdiction of the deptt. Of Health & Human services.

• Has authority over the labeling, packaging, branding, ingredient listing & advertising of packaged foods & drugs products

• Is authorized to require caution & warning labels on potentially hazardous products & also has limited authority over nutritional claims made in food advertising.

• It has the authority to set rules for promoting these products & thepower to seize food & drugs on charge of false & misleading advertising.

• It’s heavily involved in advertising & promotion of tobacco products.

3) Federal Communication Commission : (1934)

• Regulates broadcast communication. Jurisdiction over TV, radio & telephone industries.

• Has authority to license broadcast stations as well as to remove a license or deny renewal to stations not operating in public’s interest.

4) Advertising Review Council :

• Monitors all advertising, promotional & marketing materials for interactive entertainment software products that are released to the public.

• It includes print ads, packaging, radio & TV spots, internet advertising, online stores, posters & demos.

• It’s goals is to ensure that interactive entertainment software publishers follow standardized requirements for the display of rating info. & that advertising content in responsible, appropriate, truthful & accurate.

• The council also implements marketing guidelines that prohibit gamepublishers from targeting audiences for whom products are not appropriate.

5) Children’s Advertising Review Unit : self – regulation

•Resolves issues related to advertising to children.

•It reviews & evaluates advertising claims for truth & accuracy & compliance with CARU’s guidelines which are set with higher standards than low.

• It helps to ensure that commercials or advertisements directed to children contain responsible & positive social messages. It monitors English & Spanish language ads.

6) Advertising Standards Authority : (ASA, 1973)

• ASA established a separate self – regulatory body called theAdvertising Standards Complaints Board formerly advertising standards council) to administer the codes of practice in New Zealand.

• Has 4 public representatives with no connection to Media & Adv. 4 persons from ASA, reps from media, advertising agencies & advertisers

• Adjudicate on complaints received about ads which may be in breach codes of practice.

• Advise the ASA on interpretation of the codes & possibleimprovements in them.

• Report to ASA on any aspects of advertising which is causing concern.

Indian Regulatory Bodies : Enforce rules & regulations for the benefits of the public.

a)Advertising Standard Council of India : (ASCI) is a voluntary self – regulatory body set up by advertising community

•To ensure that all advertising in India is fair, truthful, safe & legal.

• Members of Boards are drawn from various companies.

• ASCI code is applicable to press, TV, radio, films & even promotionmessages on packaging.

• During the year ended 31 March, 2002, 196 complaints were reviewed by the council of which 92 were upheld (the ads were found to be in contravention to ASCI Code). 73 of the advertisers concerned assured compliance with the council rules.

b) Information & Broadcasting Ministry : Regulates advertising on TV & other media.

Regulations on Advertising

Beverages/ alcohol

• Not permitted • Print & outdoor do allow indirect• Advertising• Satellite TV accepts alcohol directly

Cigarettes Not permitted on air media, including satellite

Pharma/Drugs Rules vary with every clinic, institute, lab

Advertising to children Restriction of direction/attitude is placedon children’s commercialsNo infant food advertising is acceptable Overseas commercials are acceptedNo language restrictions exist.

c) Self – Regulation by Media : Reader’s Digest Doesn’t accepttobacco & liquor ads. Several publications refused to feature someof Beneton’s Shock ads. TV Networks have their own standards.Different Ads are shown at different times to viewers. TV networkshave guidelines for ads. To children.

3) Ethical Issues in Advertising :

• Although many laws govern advertising, not all advertising isregulated.

• Numerous advertising – related issues are left to the discretion of the advertisers & are based on ethical concerns.

The following issues are central to ethics :-

•Advocacy•Accuracy•Acquisitiveness

Advocacy – Advertising by its nature, tries to persuade its audience

to do something. As a result it is not objective or neutral,which disturbs critics who think it should be.

Accuracy - Beyond the easily verifiable claims in an advertising message are matters of perception.

Will buying automobile make me envy of my neighbors?

Subtle message are more troubling when aimed at children & older people

Acquisitiveness : Advertising is symbol of our society’s pre – occupation with accumulating material objects

•Because we are continually exposed to an array of changing newer & better products, critics claim we become convinced that we must have these products.

• Codes of ethics provide only general guidelines. When advertising questions are not clearly covered by a code, a rule, or a regulation, someone must make a decision.

• Even though an ad. may increase product sales, do you use copy that has an offensive double meaning or illustrations that portray people in stereotypical situation ?

• Do you stretch the truth when making a claim about a product ?

• Do you malign the competitor’s product even though you know it is basically the same as your own?

Key Ethical Issues in Advertising :

•Puffery •Taste•Stereotyping•Children’s advertising•Advertising controversial products•Subliminal advertising•Shock ads•Weasel claims•Surrogate advertising

Client – Agency Relationship :

•Plays role of closing distance between the advertiser & Media

•Depending upon size & the nature of agency, it offers numerous •services to the advertiser :-

Media buyingCreative developmentMarketing strategy

Sales Promotion Communication task Prepare print, electronic & outdoor ads. Collateral designs like pop & display material

Types of Agencies :-

Full service agency All marketing communication services.Research, design & develop ads, art work,media buying, production.

Creative Agency Writing copy & design service

A media independent buys space & time, related research& audience measurement data

A composite agency both creative + media with accompanying research

Structure of Advertising Agencies :

•Account Executive•The creative team•The account planner or research•The media planner & buyer•Account director•The creative director•Production house•Release to media

How agencies are paid for their work :-

•Ad agencies are paid a commission on the basis of % (which variesform medium to medium & from time to time) on the value the space& time that they buy from the media on behalf of their clients.

•20% charges as commission on production costs

•Technical agencies get paid by the media & not by clients

How to select an adv. Agency

Invite a large no. of agencies who meet the predetermined minimum criteria.

The purpose is to seek required info. n the following format to evaluatetheir suitability.

• Particulars• CMD & Directors• Average age of senior team of directors• Agency history & ownership pattern• Year of establishment • Take over & mergers, if any

• Size of turnover & growth (last 5 yrs)commission fees forecasts

• Clients won & lost (past 3 yrs)• Clients list (at present)• Billing by products• Min. size of account required

AccountsNew product from existing clientsNew products from new clients

Media – related info.

•% on TV•% on press national & local•% on sales promotion•Staff turnover•Key personnel•Agency annual report & accounts

Account planning :

•Is a process that involves conducting research & gathering all relevantinformation about a client’s product or service brand & the consumers in the target market.

•It facilitates the creative process by providing necessary inputs to the creative process.

• It’s an important link between the client & the advertising agency’screative team.

• Account planner’s job is to provide the key decision makers with all the info. They require to make an intelligent decision.

• Account planner’s uses research (both primary & secondary) to gain more info. about the brand in its market place, the consumer’s perspective, competitor info. & shares this info. to contribute or indirectly to develop an appropriate advertising campaign.

• Small agencies may not afford to have account planner deptt or if they have the deptt., it may lack the expertise for certain aspects or problems related to brand promotions.

• A typical ad. campaign might be influenced, directly or indirectly, by info from many sources. Both outside research suppliers & agency’s own account planning deptt. are the major sources of info.

• The account planner must sort out the potentially relevant material & puts it into a format that can be used.

A full service Agency : Deptt & functions

B.O.D

CEO

Account Director

Account Executive

Marketing Media Creative Production AdministrationPlanning

MarketResearch Space

Buying Air time Spot buying

Copy Writing

Script Writing

Studio

Art Buying

TV

Hiring Productioncompany

Print Buying

Secretarial

Library

Accts

Various positions & functions in a full service agency

•Account director•Competing accounts•Account executive•Contact report (minutes of meeting)

Role of account planning in Dev & execution of an adv. Campaign

•Initial briefing •The budget •The company, product or service•The market•Distribution

• Brand• Price• Packaging• Completion• Report to the agency head• Report to the deptt. head• Preparing the campaign