Using some sort of deception in advertising in an attempt to gain customers does not bode well for your company's eventual success, according to the Better Business Bureau. When profit is the only aim, companies tend to lean on ads that use misleading images, omit important facts and conceal hidden costs to convince consumers to purchase a product or service. This type of marketing deprives consumers of the truthful information needed to make informed decisions -- and the harmful effects cascade along the chain of business.
The first and most noticeable negative effect of deceptive advertising is that it leads consumers to make uninformed decisions. If consumers are not being told the whole truth or are being shown images that contradict or overshadow the actual traits of a product or service, they are unlikely to make the best decisions for themselves. They may waste money on a product or service that can't provide what they are looking for, or they might be unaware of the pitfalls involved in the product or service. Harmful, deceptive ads may involve apparent guarantees that are contradicted in fine print, false warranties, hidden costs or serious health risks.
At first glance, it might seem like deceptive advertising harms consumers and ends up benefiting businesses that employ the practice. But deceptive advertising often does significant, even fatal, harm to companies that use it. Consumers do not like being conned, and oftentimes they will retaliate against companies that trick them. Most people will not fall for the same trick more than once. Moreover, an angry and disappointed customer will often retaliate with negative word of mouth, attacks on social media and, on occasion, lawsuits.
Employees of companies that use deceptive advertising can end up bearing the consequences. They get stuck between the customer and the advertising. The employees usually don't t write the ads or endorse them, but when consumers are angered by deceptive advertising, they have to deal with unhappy people. Customers might direct their ire at employees who can't possibly live up to the unrealistic expectations generated by deceptive ads. They may even be directly blamed for a malfunctioning product. When employees are subjected to unpleasant conditions, they are likely to leave or to not work as hard, providing more problems for the company.
The effect on competition might be one of the worst results of deceptive advertising. Competition between companies should benefit the consumer by providing better products at lower cost. It can benefit entire industries by encouraging innovation and exploration. Competition forces companies to get creative and to spend money on researching and developing newer and better services and products. However, if your competitor is spending money on making false but attractive claims about their products, for example, it may seem prudent and competitively intelligent for your company to invest in deceptive advertising rather than in innovation and creativity.