Thankful for Advertising Regulation

Without a few rules, life would be chaotic. The same can be said for the advertising industry. Its various self-regulatory bodies have been working tirelessly throughout history to protect consumers, promote competition and avoid government intervention. We can be thankful for these actions, but many times consumers are unaware of how they’re being protected. This is a little thank you note to advertising.

The 1910s and 20s saw the first calls for truth in the advertising world, and these were echoed in the 70s and 80s. Three influential consumer movements occured in the 1900s, 1920s-30s and the 60s. According to an economics library site, “In the early 1900s the American consumer movement addressed two overriding issues: the human misery caused by poverty and the prevailing caveat emptor attitude” (ebrary.net). In the 1920s, the first anti-advertising book “Your Money’s Worth” was written by Stuart Chase and Frederick Schlink.

The 1930s gave rise to “the notion of the consumer as a vital component of economic policy, alongside capital and labor” (Ad Age, 2003). Groups such as Consumers’ Research, the Consumers’ Council of the Department of Agriculture, and The Consumers’ Guide, published product reviews, gave advice on making wise and informed purchases, and made sure the public was given access to full and correct information on prices and product quality. Thirty years later during the next consumer movement, art played a big part in making changes. Rachel Carson’s “Silent Spring” (1962) was released and is often credited with beginning the environmental movement in the United States, and Ralph Nader’s “Unsafe at Any Speed” expose targeted General Motors Corp.’s Corvair, a vehicle that many considered a serious road hazard. Nader also created consumer advocacy groups on college campuses that investigated everything from baby food to insecticides, unfair insurance rates to natural gas pipeline safety.

The National Advertising Division of the Council of Better Business Bureaus has seen various successes. The NAD actually self-reports a 95% success rate in “reviewing disputes and coming to a quick, transparent determination” partly due to competitors wishing to avoid costly court cases and further government regulation. Chris Cole, attorney & self-regulation expert for Manatt, Phelps & Phillips, says “A lot of stuff gets pulled because companies are watching each other. The combination [of NAD and FTC] is certainly better than just having an enforcement agency…It’s not perfect, but it’s a better world with it than without it.”

One advertising attorney Terri Seligman says the NAD is successful partly because, “It’s in everyone’s interest that advertisers don’t lie.” More than 90% of advertisers comply with NAD decisions, usually to avoid government action. Some rules established by NAD precedent include the following.

In the case of Andersen Corp, a window and door manufacturer, the NAD regulated that reenactments can be dramatized but must accurately portray how the product performed. So you can exaggerate the “hotness of the housewife,” just not the benefits of the product. A Mercedes commercial was an example of how humor isn’t an excuse for inaccuracy. The ad showed another car crashing into the Mercedes and bouncing off with no damage to Mercedes. Most consumers would understand this to be a humorous exaggeration, but the NAD is more concerned with providing the public with realistic examples of product performance.

Think Gorilla Glue is the “toughest glue on earth?” Think again. Some elements of puffery are approved by the NAD, but other claims such as this one may allude to the ability to be substantiated when they couldn’t possibly be. The NAD is also cracking down on “clean” products based on their ingredients, for example Tom’s of Maine mouthwash, Clorox Green Works Natural Cleaning Wipes, and Whole Foods Seventh Generation. And don’t even think about hiding an ad behind the guise of an instructional video. Dyson almost got away with it on YouTube, but NAD was there again to say that even these comparative demonstrations count as commercial speech. Even names of products must contain claims that can be substantiated, unlike Bayer’s One-a-Day All-Day Energy.

Apple tried to get away with saying that their products were greener than Dell’s, but when you consider the harmful effects of manufacturing, chemicals, and solvents, it’s hard to make a good case for it. The NAD has even gone so far as to scrutinize the use of cartoons. They decided that the animated demonstration of a Charmin Bear using toilet paper “overstated the extent of the product superiority,” so now Charmin has to show a “few specs of cartoon toilet paper on their rears” in order to convey product accuracy. You can decide whether all of these regulations were very valuable or not, but you can’t say that the NAD isn’t trying.

When you look at the scrutiny, public criticism, threats of government regulation and budgetary limits, you almost feel bad for advertising’s self-regulating bodies. Given the circumstances, advertising has done pretty well for itself. Self-regulation started off rough, but over the years we have progressed and will continue to do so. Based on the readings and further research, I conclude that a spirit of honesty, friendly competition and value of consumers are part of the solution to maintaining a healthy, regulated advertising industry, and despite its many failures, advertising’s self-regulatory bodies have made some valuable contributions to protecting consumers from harm.

By |2018-10-22T11:20:24+00:00November 15th, 2018|Uncategorized|0 Comments