Business Ethics for the 21st Century: Chapter 7 (pp. 254 - 360): "Advertising and Marketing"

Advertising is everywhere:

The purpose of the Federal Trade Commission is to oversee and regulate advertising, in order to prevent false, misleading, or deceptive advertising, including advertising directed at children.

How much responsibility does the consumer bear for exercising good sense or judgment? How much responsibility does the advertiser bear for making sure that ads are truthful and non-manipulative?

ADVERTISING AND FREEDOM OF EXPRESSION

Consider the Anacin claim that its product contained more of "the pain reliever doctors recommend most." This pain reliever is none other than plain old aspirin, and generic brands will do quite nicely (and cost less).

This claim is not exactly false, but it is definitely misleading. One should note that both false and misleading ads only work insofar as consumers are uninformed. The same goes for political advertising and other forms of "rhetoric." But is it the job of advertisers to educate the public? Or is it acceptable for them to take advantage of the vulnerabilities of an uneducated or uninformed public? How much knowledge may the public be expected to have?

One thinks of the age-old saying: "Let the buyer beware." Caveat emptor (in Latin). Of course, to the extent that consumers are intelligent and informed, advertising becomes superfluous. Such consumers know what they want or need, and they know the difference between reality and hype. The point of advertising is to create wants that did not exist before and to influence choices in the direction of "advertised brands." Everybody buys cereal, but do we really need "Cocoa Puffs"? Consumers don't have to be reminded to purchase food, clothing, and shelter.

It has been argued that government's regulation of advertising, through the FTC, comes in conflict with the commercial free speech right of advertisers. Courts have ruled that commercial speech does not have the same rights as religious, political, or other kinds of speech. In fact, freedom of speech is not unlimited in any sphere. For example, speech that incites to riot or other harm to the public is never protected by the constitution. One cannot cry "fire" in a crowded theater.

One could ask, in general: Do advertisers have an obligation to inform (educate) as well as a right to influence (persuade)?

DECEPTION, "PUFFERY," AND THE CONSUMER

Most "deceptive" advertising falls somewhere between "innocent truth" and "outright lie." It is obvious, following Kant and others, that outright lies are morally wrong. The issue is: When do claims about one's product or services become deceptive or misleading? What criteria can we use?

Key to this discussion is the "intent" of the advertiser: Did the advertiser intentionally or deliberately deceive. Such intentional manipulation aims at getting the consumer to do things he or she would not normally do and might no be in his or her best interest (might even cause harm). Manipulation is nothing other than treating people as mere means, rather than as ends in themselves. One could argue, in fact, that even the term "consumers" implies that persons are directed to ends outside of themselves.

"Puffery," which is not considered "false advertising" prosecutable by the FTC, is "harmless exaggeration or colorful 'hype.'" (p. 357) Because the claims in "puffery" are so vague and subjective, they are not believed to be misleading to most consumers, who are used to and can identify such "empty" claims. Consumers expect advertisers to claim that their products are the best, the most satisfying, the finest tasting, the best looking. For example, what does the claim "all-natural" really mean any more?

See the different ads on page 358: The Volvo ad was ineed misleading, since an actual Volvo would not have survived being driven over by a truck. The frame of the Volvo in the ad was specially reinforced.

Saying something that is technically true, but misleading by virtue of what is omitted or left out, is generally not considered deceptive advertising. Such advertising is cleverly manipulative, but not illegal. Of course, one could ask whether such advertising is ethical. For that matter, one could ask whether any attempt to get people to buy things or use services they don't really need and can't afford is ethical. One interesting example in this regard is the marketing of baby formula to mothers in third-world countries, even when it has been shown again and again that milk from breast feeding is much healthier for infants than formula made from cow or soy milk.

One could ask: Should an ad be considered deceptive or misleading only to the extent that it would falsely influence a "reasonable consumer"? Is the "reasonable consumer" (something between a completely savvy and totally ignorant person) a good standard? The problem is that children generally know less, especially about what is good for them, than adults. This "education gap" makes them especially vulnerable to advertising directed towards them (another argument for turning off the TV). Advertisers can "fool" children more easily than they can mislead adults, because children know less.

ADVERTISING, MANIPULATION, AND CONSUMER AUTONOMY

One could ask: What are the psychological effects of advertising? Following the principles of behaviorism or "stimulus-response" theory, can consumers be so conditioned (like Pavlov's dog) by images and words that they lose free will to make up their own mind? What is the power or influence of advertising on the human mind? It is no accident that advertisers study human psychology.

"Subliminal advertising" is a classical case of psychological influence. What makes films (and video) work is that they present a series of still images at a rate (29 to 30 frames per second) that the brain combines so as to appear to be a "moving" image. Each image is retained just long enough, so that it overlaps the previous and the successive image. The brain (and the retina) cannot process images fast enough to see the "gaps" between the frames. In the case of subliminal advertising, images that promoted a certain product were inserted among the other images. They lingered long enough to make an impression on the subconscious, but not long enough to be actually "seen" or identified as separate pictures. In this way, the advertiser got his/her message in, without the cosumer realizing what had happened. The same has also been done with auditory sounds. Incidentally, the use of subliminal images in advertising has been banned.

Rational Persuasion, the explicit use of arguments and claims back up by evidence, shows respect for persons as autonomous free beings who should think for themselves and be allowed to make up their own minds and make their own choices. Coercion (use of force), whether "subconscious" or direct treats people as objects that can be directed or moved (as sheep can be herded). Manipulation lies somewhere between rational persuasion and coercion. It is an attempt to "condition" a certain response, generally by relying on emotional "arguments" and apparently rational arguments that have unsubstantiated claims or important information intentionally omitted.

According to John Kenneth Galbraith, advertisers "'manage' consumer preferences through the medium of advertising." (p. 360) In other words, advertisers shape consumers wants in such a way that consumers come to prefer precisely those products which producers are willing to provide. Consumers are "talked out of" wanting certain things and are "talked into" wanting other things. Their desires are artificially created and directed (almost as if they were wearing "blinders"). For example, consumers "stopped wanting" public transportation and economical cars and they started wanting more expensive (and profitable for the producer) gas-guzzling vehicles. Wants do not arise spontaneously from the heads of consumers; they are created by persuasive advertising. This constitutes a direct challenge to free will and autonomy (another argument for turning off the TV, in which the main purpose is advertising and "entertainment," rather than education or information).

Some Types of Deceptive or Misleading Advertising:

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