Morals and ethics exist in several shades of gray. However, when it comes down to the ethics of advertising, the Federal Trade Commission has a concrete set of rules organizations must follow when advertising to their consumers. The FTC is a federal agency that exists solely to protect consumers, maintain competition and advance organizational performance in the United States.
TL;DR (Too Long; Didn't Read)
Ethics of advertising include focusing on the truth, providing evidence for claims, and disclosing all affiliations in advertising.
Focus on the Truth
Above all, ethical advertising focuses on the truth. The FTC enforces truth-in-advertising laws, which dictate that advertisements must be truthful and not misleading, and cannot be unfair. This applies to any advertisement regardless of where it appears, be it television, radio, print, online, billboard or other locations. When dealing with advertisements for food, drugs, alcohol and tobacco, in addition to children’s products, the FTC pays special attention and monitors industry best practices.
Provide Substantiated Evidence
Related closely to the truth, ethical advertising ensures that any claims are substantiated by scientific evidence when possible. When dealing with health products, over-the-counter medications and dietary supplements, it’s especially important to provide solid backing for any claims or testimonials. The evidence needs to be objective. Americans spend billions of dollars in this area each year, so it’s imperative to meet ethical guidelines when advertising these kinds of products or services.
Disclose All Affiliations
While advertising laws apply online as well, new issues arise as new technology is developed. The FTC regulates any disclosures be made in online ads as close to the claim as possible. For example, if an online ad makes a claim that can be misleading or deceptive, then certain qualifying information must be disclosed — otherwise, the ad is no longer considered truthful. The FTC insists that any affiliations within the ad or promotion be clear and conspicuous. If a blogger, for example, is writing about a health product which she is being paid by the company to promote, she must then disclose her affiliation with the company and let her audience know that she is being paid to write that post.
Avoid Costly Penalties
If an organization is producing ads which do not follow the truth-in-advertising laws, the FTC will prosecute them, resulting in large fines and poor publicity for the company in question. An advertising agency based in Minneapolis, Minnesota, was required to pay a fine of $2 million for issuing advertisements for weight-loss supplements with no substantiated evidence that they actually worked. The radio ads featured testimonials from customers who were fake; this was also not the first time the agency was in hot water for producing untruthful advertisements.
- Federal Trade Commission: Truth in Advertising
- Federal Trade Commission: Advertising and Marketing
- Federal Trade Commission: Advertising and Marketing on the Internet: Rules of the Road
- AdWeek: FTC False Advertising Judgment Marks Largest Fine Ever Paid by an Ad Agency
- Management Study Guide: Ethics in Advertising
- Federal Trade Commission: Health Claims
- Federal Trade Commission: .com Disclosures
- Privacy Policies: FTC Disclosure for Affiliates: The Definitive Guide