Truth in Advertising

Truth in Advertising

Consumers depend on the product information provided by the manufacturer through advertising in order to make accurate and informed purchasing decisions. Manufacturers divulge this information through strategies such as Direct-to-consumer advertising to influence desired consumer brand behavior. In order to ensure that such product information is accurate and adequate, agencies such as the Federal Trade Commission (FTC) are tasked with regulating and enforcing appropriate advertising. However, FTC appears to be inefficient in assuring consumer protection, putting consumers at risk of an unsafe or defective product. It is, therefore, the ethical duty of a business’ management to act in the best interests of concerned stakeholders, particularly consumers by upholding truth in advertising.

The Role of FTC

The Federal Trade Commission is the agency charged with ensuring consumer protection by safeguarding consumers from deceptive advertising practices of manufacturers. This is generally through the evaluation of the information presented to consumers about products manufactured or services offered by a business to ensure consumers are not misled through misrepresentation or omission (Spinelli, 2014). The agency investigates suspected violations of advertising regulations (Spinelli, 2014), and sues businesses culpable for deceptive advertising.

Nevertheless, the FTC’s approach to consumer protection leaves consumers vulnerable to deceptive advertising. Firstly, the agency relies mainly on a self-regulation approach to truthful advertising by merely educating businesses about their responsibilities and obligations (Spinelli, 2014). This approach offers too much leeway to businesses that may opt to indulge in advertising practices that are only slightly within the law, just enough to avoid an outright violation.

Similarly, FTC pursues a retrospective approach to enforcing truthful advertisement. The agency generally acts to remedy violations of advertising regulations rather than deter them (Spinelli, 2014). It relies on allegations of violations to identify culprit businesses to which it issues cease-and-desist orders (Spinelli, 2014). This means that by the time action is taken, the damage has already occurred, and the businesses have probably achieved the desired brand behavior through deception. As such, even in the presence of regulations to direct advertising, consumer protection is ultimately determined by the ethics of the business.

Truth in Advertising

Notably, sometimes, it may be acceptable to push the limits of truth to promote sales if an organization thinks it is truly acting in the best interests of the buyers. Since ethics deals with whether something is good or bad, the distinction between what is ethical and what is unethical is ambiguous (Sire, 2009). Similarly, as human beings, we are innately fashioned with a relative sense of morality that guides how we think and behave (Sire, 2009). As such, even when presumably acting in the best interests of the consumers, a business’ action may give the impression of being unethical or ethical, depending on an individual’s morality.

It may, therefore, be excusable if a business’ management chooses to stretch the truth in advertising through relative or absolute omission or representation out of expediency. Sometimes the business may overstate the qualities of a product in an advertisement just to get consumers to understand its underestimated benefits (Schauster & Neill, 2017). Additionally, since moral relativity applies to the buyer too, the buyer can consider the information presented to them in an advertisement and act at their own discretion and conviction. If the business does not directly intend to deceive or mislead, pushing the limits of truth may, therefore, not be so unacceptable.

Nevertheless, the relationship between a business and consumers of its products is one of mutual interpersonal trust and confidence. The buyer depends on the business to act out of goodwill by communicating accurate information about a product (Stanwick & Stanwick, 2016). Since the buyer initially has little or no information about the quality of a product, including its benefits and risks, the information supplied by the business about the product through advertisements tends to shape the buyer’s reality. As a result, if the business offers misleading information, such as exaggerating the benefits of a product or withholding essential risk information, it acts in contravention of this interpersonal goodwill (Stanwick & Stanwick, 2016). The buyer’s reality is distorted since he/she forms and acts based on a misguided image of the product.

The management of every business, therefore, has a responsibility to serve in the interests of both consumers and protection agencies. Firstly, the management can formulate self-regulatory policies on advertising based on the business’ ethical background and existing ethics agency regulations (Stanwick & Stanwick, 2016). These policies will serve as safeguards to ensure the business observes truth in advertising as much as possible. All advertisements can be evaluated against this policy, and changes can be made in parts that do not observe the policies. These self-regulatory policies can be made public to consumers and agencies, which will help uphold observance by increasing the number of ethical watchdogs.

Similarly, the management must ensure advertising information is accurate, understandable, and has sufficient detail. If the advertiser opts to push the limits of truth in an advertisement, the management must ensure the information leaves adequate room for consumer discretion. This includes the use of terms that are unambiguous, simple and definable (Stanwick & Stanwick, 2016). This is especially crucial in events where competing advertisers use different descriptions for the same product term (Stanwick & Stanwick, 2016). Such advertising will uphold human dignity by safeguarding vulnerable consumers from unintentional manipulation. Finally, information should not be blatantly misleading, such as using images that are not a true representation of a product used to bait customers.

References

Schauster, E., & Neill, M. (2017). Have the ethics changed? An examination of ethics in advertising and public relations agencies. Journal of Media Ethics, 45-60.

Sire, J. W. (2009). The Universe Next Door: A Basic Worldview Catalog. ReadHowYouWant.com.

Spinelli, C. J. (2014). Far From Fair, Farther From Efficient: The FTC and the Hyper-Formalization of Informal Rulemaking. Legislation and Policy Brief, 129-170.

Stanwick, P. A., & Stanwick, S. D. (2016). Understanding Business Ethics. SAGE Publications.

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Truth in Advertising

What is truth in advertising? Read the article “Truth in Advertising” by Carol Rados. How do you know when an organization is over-promoting a service or product? Caveat Emptor means “buyer beware,” and it is the common mantra of organizational marketing and sales groups. There are countless examples of caveat emptor in the marketplace. Analyze the Federal Trade Commission’s (FTC) response to validating marketing claims. Can we really trust that the FTC is screening the ads we are exposed to? Is there anything wrong with pushing the limits of truth to close a sale? What is management’s duty to serve the stakeholders’ best interests?
Prepare a three-page response paper (five pages total, including cover page and reference page) that applies an interdisciplinary and multidimensional approach to ethical and analytical problem solving and demonstrates valid and reliable research-based methods for applying leadership theory to practice within the context of ethical theory and biblical worldview. Develop your paper based on the reading assignments, discussion forum, and session assignments, integrating biblical principles with outside research-based resources to support your presuppositions. A good paper should include at least three sources in addition to the course texts and be formatted according to APA requirements.

Reading:
Stanwick, P., & Stanwick, S. (2016). Understanding business ethics (3rd ed.).
Chapter 8: Ethics and the Environment
Chapter 9: Ethics and Information Technology
Chapter 10: Marketing and Advertising
Chapter 11: Ethical Issues in the Developing World
Sire, J. W. (2009). The universe next door: A basic worldview catalog (5th ed.).
Chapter 5: Zero Point
Chapter 6: Beyond Nihilism
The attachment is the required reading of the article by Carol Rados