List of Ethical & Legal Issues When Advertising
Advertisements are the most common marketing method used by businesses. Ads last longer than word of mouth or networking, and ads have a greater potential to reach a large number of people, especially in the digital age. Because the public is bombarded by advertising on a daily basis, ads are subject to many regulations. When advertising, you should should keep legal and ethical considerations in mind.
The basic legal standard for advertising is that ads must be truthful and not misleading. Several factors are considered when analyzing whether an ad is truthful and not deceptive. These include whether the claim made by the advertisement is express or implied, who the reasonable consumer is for the product and whether the false or misleading content (if any) is material enough such that it would influence consumer buying behavior.
The other legal standard for advertisements is reliable evidence that supports any claims being made by the advertisements. Not every ad needs evidence. However, if a garbage bag company boasts that its bags are 50 percent larger than the leading competition, the garbage bag company needs to have actual evidence to support such claim. According to the Federal Trade Commission, the exact level of evidence needed varies depending on the claim. At the very least, an advertiser must be able to produce the level of evidence it says it has. Using the previous example, the garbage bag company must identify the leading competition and demonstrate that its bags are actually 50 percent larger.
Ethical considerations fall into a gray area for advertisements. It is possible for an advertisement to be legally permissible (in that it is truthful, not misleading and supported by objective evidence), but for it to be unethical. Ethical considerations relate to the manner in which the content is being delivered and the message of the advertisement. According to the International Charter, ads that play on fear would be unethical. An advertisement for car tires that claim (truthfully) to be safer from the competition in bad weather conditions may be unethical if it displays actual photos from accident scenes with gory imagery and sensationalized, emotionally charged content. It is also unethical to market products towards groups for which those products would be inappropriate, such as advertising cigarettes to teens.
The Federal Trade Commission regulates advertising in the United States. False, misleading ads fall into the sphere of the FTC’s jurisdiction. Advertisers face criminal and civil penalties for illegal ads. The same penalties may not apply for unethical ads. A legal ad that happens to be unethical could still harm the business, however, particularly in the form of consumer backlash and damage to reputation.