Thomas Mitchell BA685 Week 4 Advertising Regulation

Advertising Regulation
Week 4- 6/17/15
Thomas Mitchell
Grantham University
Instructor: Dr. Matthew Gonzalez

Abstract
The information contained within this paper will be on the subject of Advertising Regulation. In the United States there are laws that oversee what companies can and cannot do when it comes to advertising. This is designed to protect the public. The information in this paper will touch on the agencies that can be involved in overseeing advertising, as well as laws that are designed to keep businesses honest.

Advertising Regulation Businesses exist for the purpose of making money. To do so, companies are constantly looking to improve sales of their products or services. In order to accomplish this, it is important that consumers be made aware of what it is that a business has to offer. As previously discussed, marketing is everything involved in the promoting of a business’s products or services. But in the following paragraphs one specific aspect of marketing will be discussed. The discussion will be dealing with advertising. When something is advertised it is made known. To advertise something is to describe or draw attention to something in a public medium in order to promote its sales. It probably goes without saying that effective advertising is a key to the success of a business (Advertising & Marketing Law, 2015). Today advertising has become somewhat of a science. Most advertising campaigns have a few fundamental similarities that have been found to be successful in all advertising. A few advertising fundamentals are keeping the advertisement simple. A complicated ad will lose the audience. Another is to appeal to your target audience, the ones you are trying to convince to make a purchase. Include a call to action which would be the act of purchasing. Another important aspect of advertising is appealing to basic emotions. Use easy arguments to win over your audience. Also, ads should use language and images to relate to the senses. Does the ad coordinate what the consumer sees with what they hear? Allow powerful video to speak for itself (American Research Group, Inc, 2012). There are many more aspects of advertising, but these examples show that effective advertising can get very involved and take much effort. Due to these demands and the desire to be successful, it can also become very tempting to stretch some of these ideas to the point that they would be considered deceptive. It is the responsibility of every business to ensure that every claim they make in their advertisements are truthful, not deceptive (Advertising & Marketing Law, 2015). There are literally millions of businesses reaching out to billions of people worldwide, all of them competing with each other for every consumer’s business. It would be naïve to think that there would never be occasions when some might overstep the boundaries and engage in advertising that is deceptive. This is especially true when considering online businesses. Since there is never any personal contact, it can be tempting to use methods of advertising that are questionable (Online Advertising Law, 2015). Because of these reasons there are organizations that are responsible for overseeing the advertising that businesses do, and make sure that these ads are honest and do not deceive the consumer. Here in the United States, the Federal Trade Commission (FTC) is tasked with the main responsibility of keeping businesses honest in their advertising. But there are several other agencies that also have power to assist in regulating advertising. Among them are the Food and Drug Administration (FDA), the Bureau of Alcohol, Tobacco, and Firearms (BATF), and the Department of Transportation (DOT) (Schneider, 2015). These agencies assist the FTC in monitoring advertisements of products and services that they deal with directly. The purpose is to ensure that advertising is free of deception and is fair (Bureau of Consumer Protection, 2000). Advertisements on the Internet are required to adhere to the same laws and practices that apply to all forms of advertisement. As such these guidelines from the Federal Trade Commission Act, Section 5, apply to all advertisements including those on the Internet. These guidelines state that an advertisement is deceptive if it misleads consumers and affects consumers’ behavior or decisions about the product or service. In addition it can be considered unfair if the injury it causes, or may cause, is substantial, not outweighed by other benefits, and not reasonably avoidable (Bureau of Consumer Protection, 2000). As mentioned, these legal standards apply to all advertisement, even that done on the Internet. In addition to simply adhering to laws to remain legal, the advertising industry, and especially the online advertising industry, is coming to realize that going above and beyond legal requirements and self-regulating their own actions is beneficial to the industry and actually promotes growth (AdExchanger, 2010). Self-regulation means setting voluntary rules and standards of practice that go above and beyond legal obligations. There are self-regulatory organizations responsible for overseeing this commitment and for enforcing these rules. This gives the consumer an added layer of protection against deceptive advertising (Self-Regulation, 2015). Some of the organizations that have been set up for this self-regulation have been in place for decades overseeing regular advertising. Most use the International Chamber of Commerce’s Consolidated ICC Code of Advertising and Marketing Communication Practice, introduced in 1937, as the gold standard for self-regulation. Some of these self-regulatory organizations (SROs) include the Advertising Standards Authority (ASA) (Internet advertising to face stricter regulation, 2011). Others include the European Advertising Standards Alliance (EASA), National Advertising Review Council (NARC), and the Children 's Advertising Review Unit (CARU) (Self-Regulation, 2015). As self-regulation becomes more prominent, the question arises as to whether or not it is meant to replace legislation. The answer is no. Self-regulation does not replace statutory legislation. It is meant to complement the existing framework of legislative regulation. It can be likened to having a double layer of protection. In cases where companies continue to breach self-regulatory code, they can then be taken to court and punished under statutory law. In addition, a company that continues to breach the self-regulatory code, positions itself to suffer the loss of public support from SROs. This public ‘naming and shaming’ can cause a company to lose the respect of consumers and along with their respect goes their business (Some facts about advertising self-regulation, 2015). So it is obvious that self-regulation, in addition to statutory legislation, is a big step forward in legitimizing advertising, especially online advertising. When the public sees that the industry is taking steps to protect them, it can only benefit the advertising industry. This will result in the advertising industry and the many businesses it serves continuing to grow. While there may be that there is still a lot of progress to be made, it is plain to see that by taking every step possible to regulate advertising, companies are not just preserving current business, but they are ensuring that business will continue to grow on into the foreseeable future.

References
AdExchanger. (2010, June 11). Why Online Advertising Should Be Regulated. Retrieved June 17, 2015, from Ad Exchanger: http://adexchanger.com/the-debate/why-regulated/
Advertising & Marketing Law. (2015). Retrieved June 17, 2015, from U.S. Small Business Administration: https://www.sba.gov/content/advertising-and-marketing-law
American Research Group, Inc. (2012). Ten Rules for More Effective Advertising. Retrieved June 17, 2015, from American Research Group, Inc.: http://americanresearchgroup.com/adrules/
Bureau of Consumer Protection. (2000, December). Advertising and Marketing on the Internet: Rules of the Road. Retrieved June 17, 2015, from Federal Trade Commission: https://www.ftc.gov/tips-advice/business-center/guidance/advertising-marketing-internet-rules-road
Internet advertising to face stricter regulation. (2011, February 12). Retrieved June 17, 2015, from The Telegraph: http://www.telegraph.co.uk/technology/internet/8320228/Internet-advertising-to-face-stricter-regulation.html
Online Advertising Law. (2015). Retrieved June 17, 2015, from U.S. Small Business Administration: https://www.sba.gov/content/online-advertising-law
Schneider, G. (2015). Electronic Commerce (11th ed.). (A. Brodkin, Ed.) Stamford, CT, USA: Cengage Learning. Retrieved May 28, 2015, from www.cengage.com
Self-Regulation. (2015). Retrieved June 17, 2015, from International Chamber of Commerce: http://www.iccwbo.org/Advocacy-Codes-and-Rules/Areas-of-work/Marketing-and-Advertising/Self-regulation/
Some facts about advertising self-regulation. (2015). Retrieved June 17, 2015, from Responsible Advertising & Children : http://www.responsible-advertising.org/selfregulation.asp

References: AdExchanger. (2010, June 11). Why Online Advertising Should Be Regulated. Retrieved June 17, 2015, from Ad Exchanger: http://adexchanger.com/the-debate/why-regulated/ Advertising & Marketing Law. (2015). Retrieved June 17, 2015, from U.S. Small Business Administration: https://www.sba.gov/content/advertising-and-marketing-law American Research Group, Inc. (2012). Ten Rules for More Effective Advertising. Retrieved June 17, 2015, from American Research Group, Inc.: http://americanresearchgroup.com/adrules/ Bureau of Consumer Protection. (2000, December). Advertising and Marketing on the Internet: Rules of the Road. Retrieved June 17, 2015, from Federal Trade Commission: https://www.ftc.gov/tips-advice/business-center/guidance/advertising-marketing-internet-rules-road Internet advertising to face stricter regulation. (2011, February 12). Retrieved June 17, 2015, from The Telegraph: http://www.telegraph.co.uk/technology/internet/8320228/Internet-advertising-to-face-stricter-regulation.html Online Advertising Law. (2015). Retrieved June 17, 2015, from U.S. Small Business Administration: https://www.sba.gov/content/online-advertising-law Schneider, G. (2015). Electronic Commerce (11th ed.). (A. Brodkin, Ed.) Stamford, CT, USA: Cengage Learning. Retrieved May 28, 2015, from www.cengage.com Self-Regulation. (2015). Retrieved June 17, 2015, from International Chamber of Commerce: http://www.iccwbo.org/Advocacy-Codes-and-Rules/Areas-of-work/Marketing-and-Advertising/Self-regulation/ Some facts about advertising self-regulation. (2015). Retrieved June 17, 2015, from Responsible Advertising & Children : http://www.responsible-advertising.org/selfregulation.asp