Ethical Standards in Advertising

It is really hard to determine if an ad is misleading. Even with the use of laws, standards and academic research there is still a lack of understanding and an agreed upon definition which could be used to identify it. With this being said, if the definition of a misleading ad is so broad how are consumers expected to be able to identify it?

What might we assume to be a misleading ad if it is so hard to determine it?

Three types of false advertising

1. Fraud

Fraud deliberately creates false beliefs about a product. When fraud is done in an ad it is usually because the advertisers intent does not take into account the wellbeing of the consumer. The problem with these types of ads is that it is hard to take action against it because you would have to proved that the claims made are fraudulent.

1. Falsity

When an ad is falsified it usually refers to the idea that the ad is claiming something and there is a discrepancy in the claimed facts. An example of a falsified ad is when an ad states something such as a reduced price but then in the store the price is not reduced.

1. Misleading

A misleading ad really focuses on the belief of the consumer in combination with the exposure of an ad. In this situation, there is a discrepancy between the belief of the consumer and the facts presented in an ad.

So now we have a good understanding of what a misleading ad is, how does this played out in an actually campaigns? When a company has stepped over that fine line, how much does it cost them? For the company, we have to question if they are willing to change their policies to provide accurate information to the consumer or are they only interested in their profits?

Lets look at three companies to answer these questions.

Activia Yogurt (Falsified information)

The brand Dannon falsified information about their product by stating that the health benefits of their yogurt were superior to the competitors. The company used such words as clinically and scientifically proven to drive this falsified belief in their campaigns.

This information was incorrect because the nutritional value of the yogurt was exactly the same as any other yogurt. Over time, some consumers started to question this claim and they ended up bringing the company to court. In the end Dannon was force to setting a pay up to $45 million in damage to its consumers.

Olay Definity Eye Cream (Misleading)

In 2009, Olay used the model Twiggy in their ad campaign to promote an eye cream. In this ad Twiggy was shown with no wrinkles. They claimed that the eye cream would remove wrinkles so you can look younger. Twiggy, at the time the ad was released, was in her early 60s and that the images were excessively retouched. In some areas of the world, such as Britain, the ad was deemed as misleading and could potentially have a negative impact on the body image of individuals. In the end, the ad was pulled.

Hyundai and KIA vehicles (Fraud)

In 2001, the Korean Ministry of Construction and Transportation found out that the two car company tolds their consumers that their cars had 9.6% more horsepower than the cars actually had.

When consumers received their car they were extremely disappointed to find out that the car they were expected was not what they got. As a result, comsumers in California took a class action lawsuit claiming that the company was able to sell more cars at higher prices because of the fraudulent claims made in their ads. They settled the lawsuit for something between $75 million and $125 million.

Even if determining if an ad is making a false claim, as a consumer we have to make wise decisions based on prior research and our own judgement. Yes, at times this is hard to do. With that being said, with the tools and the knowledge in your hands you will be able to determine if an ad is making a false claim. Furthermore, with these tools you can stand up for yourself and over time with enough people making claims, companies will be forced to change even if they do not care too.