Transcript Advertising regulation

Advertising
Regulations
What is
Advertising…..????
• Advertising is a non-personal
communication of information usually paid
for and persuasive in nature about
products, services or ideas by identified
sponsors through various media.
What is Advertising
Regulation..??
• Advertising regulation refers to
the laws and rules defining the ways in which
products can be advertised in a particular region.
• Rules can define a wide number of different
aspects, such as placement, timing, and content.
WHAT IS DECEPTIVE
ADVERTISING…????
•An advertisement is called
deceptive when it misleads people,
alters the reality and affects buying
behaviour.
Promotional techniques designed
to influence buyers with false or misleading claims.
Deception exist when an advertisement that makes
false claims or misleading statements, as well as
advertising that creates a false impression.
WHEN IS AN ADVERTISIMENT
IS DECEPTIVE…??????
•
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•
false promises
unsubstantiated claims
incomplete descriptions
partial disclosure or visual
distortion of products
• false testimonials or comparisons
According to Federal Trade Commission (USA)
deception occurs when 1. There is misrepresentation, omission, or a
practice that is likely to mislead.
2. The consumer is acting responsibly in given
circumstances
3. The practice is material and consumer injury is
possible because consumers are likely to have
chosen differently if there is no deception.
1. Suggesting that a small difference is
important :
2. Artificial product demonstration
3. Using an ambiguous or easily
confused phrase
E.g.. “govt.supported” & govt.approved”
4. Implying a benefit that does not fully or
partially exist.
5.Implying that a product benefit is unique
to a brand.
6.Implying that a benefit is needed or that a
product will fulfill a benefit when it will
not.
7.Incorrectly implying that an endorser
uses and advocates the brand.
8.Omitting a needed qualification.
9.Making a claim without substantiation.
10. Bait & switch
•Bait-and-switch is a form of fraud.
•First, customers are "baited" by advertising for a
product or service at a low price;
• Second, the customers discover that the advertised
good is not available and are "switched" to a costlier
product.
• Bait-and-switch tactics are frequently used
in airline and air travel advertising.
• Hotels widely use the form of bait-and-switch
tactics known as 'resort fees'. They first attract
customers by advertising the lower price (which
appears on all promotional materials and rate
comparison engines), and charge customers the
mandatory "resort fee" when they arrive for
check-in.
11. Telemarketing
12.Intellectual property
Puffery –
Claiming all good things about one’s own
offering in order to persuade and capture
the market.
Ex.
Snap
Deal
News
Channels
Domino’s
2 General Forms
Using degrees
of comparison
Using Exaggerated
spoofs that are
untrue
1.
Using degrees of comparison
 Subjective opinion about a
product’s quality
 “best” or “greatest”
Ex. “best deals”
“best offers”
“greatest discounts”
2.
Using Exaggerated spoofs that are
untrue
 Exaggeration extended to the
point of out-right spoof that is
obviously not true.
Ex. “2 minutes maggie”
“Mileage rates for automobiles”
Who is deceived - The Reasonable Consumer?
According to FTC, essentially all are to be
protected , in particular those who are
 NAÏVE
 TRUSTING
 OF LOW INTELLIGENCE
Ex
Foundation Makeup Cream
(Restoring Youthfulness)
Hair coloring product
(color hair permanently)
In 1983, the FTC narrowed its definition of
deception in an important way
Previously –
An advertisement was held to be deceptive if it
has the tendency to deceive a substantial number of
consumers in a material way
Now –
Consumers acting reasonably would not be
materially accepted.
Outcome of a study
More
involved
receivers
more
critical
message
analysis
greater
cognitive
elaboration
Materiality of the Falsehood
“Material Untruth”
Cease-and-Desist Orders
Restitution
Affirmative Disclosures
Corrective Advertising
Cease-and-Desist Orders
The only formal procedure established by
the FTC Act for enforcing its prohibition of
“deceptive acts and practices.”
Prohibits the respondent from engaging
further in the deceptive practice
“go and sin no more”
Has procedural delays
Restitution
 Consumer is
damage.
compensated
for
any
 Full refunds for skin cream, diet plans,
vitamin supplements and other products
that had advertised claims not
adequately substantiated.
Affirmative Disclosures
“Clear and conspicuous disclosure” of the
omitted information.
Corrective Advertising
Rectify past deception by making suitable
statements in future commercials.
Firms charge that false
advertising has caused them
damage.
• A fast, flexible alternative to FTC and
Courts
• Complaints
from
consumers
and
competitors are investigated by the
National Advertising Division (NAD), an arm
of the council of Better Business Bureaus
(CBBB)