Then
Advertising fraud is not a new thing in advertising but it is
on television that the most controversy takes place because it is much more
difficult to protect the consumers when it comes to something with visual
component and the potential to deceive through misleading visuals and over the
top claims is very high. Oddly enough
the issue of free speech was never considered in this issue as the ruling of
the government was that free speech did not extend to advertising per se and it
wasn’t until the 1970s that that changed a bit to say that advertisers had the
right to limited free speech. This gave advertisers a little more leeway but
from the standpoint of many consumer groups this has been a little too much as
they seek to get more standards on advertisers about claims, content and the
effects that advertising can have on teenagers and children.
The most significant action in the United States regarding
advertising was the creation of the Federal Trade Commission (FTC) to regulate all ads although consumer
groups have always complained that the FTC about fraud cases against
advertising has a poor track record of success. Consumer groups seem to have a
better record of success in getting results against fraudulent claims
historically than the FTC. The FTC has been in the past reliant on regulation
being complied with by the advertisers on their own as they often do not have
the size to police all ads effectively.
It does rely on consumer groups to help.
Past issues of regulation for the FTC have included effects
of ads on Children and Teenagers as well.
In large part Television ads for smoking were removed to prevent the
influence the cigarette companies were having on teenagers with their cool ads
on television and then later in magazines.
Infomercials were banned at first because they could target children who
it was deemed could not tell the difference between a show and a
commercial. This was the same rationale
that was used for toy manufacturers not being able to advertise products at the
same time as a show the toy represents.
This changed in the 1980s when Transformers and GI Joe were allowed
after deregulation to advertise transformer and GI Joe toys at the same time
the show was on. I saw this happen and
there was a lot of talk at the time as to how this would influence
children. In the end, all we could say
is that it caused them to make and association between the two and buy more
toys related to the show.
One other thing could be stated about regulation in the past
is that the FTC did not in the past (nor the present) must prove that claims of
advertisers were not true, but that at the time the advertiser had no basis to
believe it was true even if it is found out later that it was true. It simply has to be misleading in its
claims. One pain reliever fell into this
trap several years ago claiming it was better at stopping headache pain than
other pain relievers but failed to mention that its main ingredient wsa aspirin
one of the pain relievers it was putting itself up against.
Now
Despite the FTC’s oversight advertisers are still very much
capable of running false ads. Some of
their techniques, regardless of regulation, are still questionable. The most common misleading techniques have
been long documented and you can have a closer look at them here:
That said there are three forms of regulation that are
currently employed to combat these tactics and they are: Government agencies,
consumer groups and self-regulation.
Government agencies covers most of the official regulation
of advertising with the FTC being the top of the regulation pyramid as far as
regulation importance. Under this
agency state agencies align themselves as well as self-governing bodies that we
will talk about later. There is a
twofold aim of these regulatory bodies.
One is the impact of the claim the advertisers make on the target
audience and the other is to police false or misleading claims. The first measures the effects of advertising
on groups that are considered vulnerable or impressionable – children and teens
most often but now on the elderly more and more. The second is to determine if the ad was
misleading in any way and that does not mean the claims are untrue but that the
way the ad presents them might give false impressions as well.
The second advocacy agency is consumer groups. Group like the National Advertising Division (NAD) and the
Children's Advertising Review Unit (CARU) of the National Advertising Review
Council (NARC) all use FTC guidelines and were largely the product of the
leadership of militant consumer advocate Ralph Nader or are at least his
advocacy children. These group are more
often than the FTC to take immediate action on false products or products they
deem harmful in some way. Because they
often have the funding and the ready-made advocacy base of supporters they are
often more effective in helping consumers take on misleading claims than the
FTC. They also are the first to damage an advertiser in the place that matters
most by helping victims of fraud sue the company responsible.
Finally, many
companies that sell products self-regulate to make their companies at least
appear more legitimate by coming under certain voluntary standards. Groups like the Better Business Bureau (BBB)and
others seek to run under certain common standards for advertising that seek to
comply with the regulations and even go beyond them to present their companies
as trust worthy. It is also not uncommon
for these groups to work with consumer groups so that there is a double seal of
approval on the advertiser that this product’s claims have been double checked
on all fronts before they are presented.
Whether perception meets reality is a matter for some debate but the
effort is to make provide a respectable side to advertising products even
though advertisers and their agencies routinely finish at the bottom of the
list as far as trustworthiness.
Later
Looking to the future of advertising regulation, I can
personally see nothing on the horizon that will change the current
situation. The FTC remains the body of
regulations on advertising along with local agencies, but their lack of
manpower will always mean they can only deal with a select group of
violators. Their record is one of filing
very few claims against advertising and getting few convictions.
The most effective form of ‘regulation’ is probably going to
continue to be the partnership that exists between consumer advocacy groups and
self-regulating bodies on the world of business. This is simply because these two institution
do not have the red tape of bureaucracy to deal with when a problem with an ad
is reported to them. They can act and advocate for the victims of
bodies can pull their endorsement faster than the FTC can act to bring charges
and prosecute them.
If there is one thing that has changed television it is
streaming has made ads more prevalent and varied. This has made the FTC’s job even far more
difficult because ads are difficult to police and now there are even more to
police. This is going to probably invoke
some changes to the FTC being necessary but more importantly consumer advocates
and self- governing bodies should be even more active but there is also
something to be said for personal responsibility.
In the early days of advertising, the slogan was ‘let the
buyer beware”. Later as television
regulation became more extensive then the slogan became ‘let the seller beware”
but now things are changing so rapidly it may be rapidly be changing back to ‘let
the buyer beware’ because the FTC, consumer groups and self-regulating bodies are
becoming rapidly overloaded.
This is what may make the internet even more important as
people review products online and report problems. It is ultimately networking between people
who buy products and have concerns about how they are being advertised that may
be the new type of consumer groups.
These groups may be less formal but they are no less effective at
creating awareness about product ads and whether their claims are fraudulent or
controversial. Social networking is
taking this to a whole new level as product reviews can almost be instantaneous. How this will ultimately affect ad claims and
regulation is anyone’s guess.
References:
Mosdell, N. (2009).
Regulation (Television). In Q. Langley et al., Key concepts in public relations.
London, UK: Sage UK. Retrieved from http://0-search.credoreference.com.libcat.ferris.edu/content/entry/sageukpr/regulation_television/0
Lee, S. and Lee, (2007). Advertising, regulation of. In J.
Jensen Arnett (Ed.), Encyclopedia of children, adolescents, and the
media. Thousand Oaks, CA: Sage Publications. Retrieved from http://0-search.credoreference.com.libcat.ferris.edu/content/entry/sagecam/advertising_regulation_of/0
Cheng, H. (2004).
Advertising fraud. In L. Salinger, Encyclopedia
of White-Collar & corporate crime. Thousand Oaks, CA: Sage
Publications. Retrieved from http://0-search.credoreference.com.libcat.ferris.edu/content/entry/sagewccc/advertising_fraud/0
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